Court notice to RBI over secured deposits in co-op banks

AHMEDABAD:

Gujarat high court

has issued a notice to the Reserve Bank of India (RBI) in response to a public interest litigation demanding that the amount of secured deposits in cooperative banks should be increased and brought at par with the security available with the nationalized banks.

A division bench of Chief Justice R S Reddy and

Justice V M Pancholi

sought reply by June 20 from the RBI on petition filed by

Jagega Gujarat Sangharsh Samiti

president Prakash Kapadia, said his advocate Rashmin Jani.

The

PIL

has cited the

Deposit Insurance and Credit Guarantee Corporation

Act and the scheme formed thereunder to put forth its case that the secured amount over deposits in cooperative banks, which is Rs 1 lakh at present, should be increased up to at least Rs 10 lakh.

The petitioner contended that since all cooperative banks function under the RBI norms, the RBI is supposed to take care of the depositors who deposit their hard-earned money in cooperative banks. The RBI must ensure that the amount lying in cooperative banks is in safe hands.

However, the present scheme provides for return of only Rs 1 lakh to depositor on a deposit over Rs 1 lakh in case the bank goes bust. This quantum of secured deposit should be unlimited in the manner the nationalized banks offer.

The quantum of secured deposit from Rs 30,000 was increased to Rs 1 lakh in 1993. Since then, there is no revision. The authorities are silent over the issue despite repeated representations and hence the HC’s intervention was sought, the petitioner argued.