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| SC asks CBI, RBI to file replies in derivatives scam |
| Press Trust of India / New Delhi Sep 10, 2010, 21:29 IST |
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The Supreme Court today asked the Central Bureau of Investigation (CBI), Reserve Bank of India (RBI) and Enforcement Directorate (ED) to file their replies in the derivatives scam case.
The case pertains to illegal sale of forex derivatives in violation of RBI and FEMA guidelines by members of the Fixed Income Money Market Derivatives Association of India (FIMMDA).
A Bench comprising Justices Dalveer Bhandari and Deepak Verma directed CBI, RBI and ED to file their reply.
It also directed all parties in this case to complete their pleading by November 8, next date of hearing.
Meanwhile, the Bench allowed the intravention application filed by the Indian Bank Association in this matter.
Derivatives are a hedge or insurance covered by banks and financial institutions to protect income and liability.
During the proceedings, Additional Solicitor General H P Raval, appearing for the CBI in this matter rescued himself from this case.
Earlier, the probe agency CBI had filed its opinion on the case and had said that it was a "herculean task" for them to probe the entire scam.
The Central Bureau of Investigation further suggested in its reply that such a probe should be conducted by the ED and banking sector regulator as it involved violation of FEMA Act and RBI guidelines.
Earlier, on March 15, 2010, the Supreme Court had stayed an order of the Orissa High Court, which had directed that a probe be conducted by premier investigative agency CBI.
Acting on a petition by an Orissa-based businessman, Pravanjan Patra, the High Court had on December 24, 2009, directed a CBI probe into the alleged sale of forex derivatives to exporters in gross violation of foreign currency laws of RBI and FEMA.
This was challenged by the Fixed Income Money Market Derivatives Association of India (FIMMDA) before the Apex Court, which stayed High Court's directive on CBI inquiry.
Earlier, the Supreme Court had directed some exporters, who requested that they be made a party in the case, to file their replies, which was later referred to the registrar of the apex court for verification.
In June 2010, Forex Derivatives Consumers Forum, who had suffered losses as a result of the alleged scam by banks and lenders owing allegiance to FIMMDA had approached the apex court requesting that they be made a party in the case.
They had requested the apex court to allow a CBI inquiry into the scam by lifting a stay on High Court order.
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