Inspection can be conducted in UWB case: HC

Mumbai, Sep 28 (UNI) The Bombay High Court today held that it could not intervene in the execution of the orders of Reserve Bank of India (RBI), but it can allow to conduct an inspection into the United Western Bank case whether any malpractices had taken place in the process leading to amalgamation.

The court while deferring hearing till October 5, also questioned the depositors' right to seek information regarding the Bank's amalgamation with the Industrial Development Bank of India (IDBI) from the RBI, the watch-dog body of all the banks in the country.

A division bench comprising Justices R M S Khandeparkar and V M Kanade were hearing the petition alleging that the Bank's amalgamation with the Industrial Development Bank of India (IDBI) was unwarranted and that they had been kept in the dark about the amalgamation.

The depositors had earlier contended that the RBI was aware that the UWB had made losses running to almost Rs 100 crore during the last two years, but they were not informed about the same.

In an affidavit, the RBI yesterday clarified that their recommendation for the amalgamation was aimed at safeguarding the interest of the depositors.

The apex bank had kept an eye on UWB since 2001 and warned it several times to improve its financial status, but the performance of the Bank kept deteriorating.

It maybe recalled that a moratorium has been imposed on the UWB, which will be in force till December 1. A depositor can not withdraw over Rs 10,000 at any given time.

UNI ARM SSS VA GC1857