Birla's RBI status questioned by CPI

No conflict of interest, says Aditya Birla Nuvo MD

The continuation of Kumar Mangalam Birla on the board of the Reserve Bank of India (RBI) is a “conflict of interest”, as one of his group firms is in the race for new banking licences, says the Communist Party of India (CPI), adding that it will take up the issue in Parliament. Aditya Birla Nuvo managing director Rakesh Jain, however, told Business Standard: “There is absolutely no conflict of interest.”

In a statement, CPI general secretary S Sudhakar Reddy said his party wanted to “immediately draw the attention of the government for serious consideration of the validity of the banking application of Aditya Birla Nuvo” and has demanded the “replacement of K M Birla as a consequence thereof from the board” of RBI.

The central bank has received applications from 26 entities, including Aditya Birla Nuvo, for banking permits.

The CPI has only a small presence in the Lok Sabha.

“I don’t expect there to be any legal issue. But I would expect any director whose group company is an aspirant for a banking licence to at least abstain from participating in any discussion involving such matters,” said Diljeet Titus, managing partner and founder of Titus & Co, a Delhi-based law firm. “This is the least one would expect to avoid any conflict of interest.”