Subramanian Swamy asks SC for CBI probe into RBI official's role in scams

BJP senior leader Subramanian Swamy has asked the Supreme Court to direct an investigation by CBI or any other competent authority, into the illegalities committed by officials of the Reserve Bank of India (RBI) in discharge of their official functions, which has resulted in various banking/financial scams in India.

Two advocates M R Venkatesh and Satyapaul Sabharwal have assisted him in filing a PIL today at the Supreme Court.

In the petition, they alleged that officials of the RBI have been in demonstrable active connivance and in grave violations of their statutory duties.

"...no officer of RBI has ever been held accountable for any dereliction of duty in case of any fraud reported by any bank. This is in sharp contrast to the number of frauds exploding in the banking sector in India aggregating to in excess of over Rs 3 lakh crore (Rs three trillion)," PIL stated.

It was further stated that in the last couple of years, various banks have reported scams after scams wherein the role of bank officials were clearly made out but surprisingly not even a single RBI official has been brought to justice despite RBI retaining the power to monitor, regulate, supervise, audit and direct the functioning of all banking companies in India.

"Put pithily, the scheme of the Banking Regulation Act makes the Reserve Bank of India the alter ego of Bank Management, more so in case of public sector banks. Yet, in none of the high-profile banking scams the Central Bureau of Investigation investigating these scams has not even sought to examine at a cursory level, the role of officials of RBI," Swamy stated in the PIL.

The petitioner has pointed out various scams including Kingfisher, Bank of Maharashtra, Uttar Pradesh- private sugar organisation, Nirav Modi/ Punjab National Bank, Lakshmi Vilas Bank, ILFS, PMC Bank, Yes Bank, First Leasing among others.

"These scams have been caused due to the active connivance of the RBI officials which has failed to prevent these scams despite being vested with substantial powers under various legislations," he said in the petition.

It was further stated the RBI has failed to protect the interest of various stakeholders which includes interest of depositors, investors and shareholders. This failure to protect the interest of stakeholders, has led to the loss of faith in the entire banking system in India with the Regulator being supinely indifferent to the series of bank frauds with questions now being raised about it.

The petition, through an RTI, has asked the RBI for the list of cases and banks involved in frauds aggregating to Rs 100 crore or more and entered in the RBI Central Fraud Registry from January 1, 2015 till date. The list of cases referred to CBI for frauds amount of Rs. 100 Crore or more by the respective banks from 01.01.2015 till date. The details of the persons against whom such action has been initiated by the RBI in respect of frauds aggregating to Rs 100 crore or more in each case from 01.01.2015 till date. However, the RBI response to the RTI filed was not satisfactory, the PIL noted.