HC to RBI, BFSI News, ET BFSI
[ad_1]
Read More/Less
Expressing concern over increasing numbers of bank frauds and scams coming to fore, a division bench comprising justices Sunil Shukre and Avinash Gharote further asked the apex bank to take penal action against erring officials, in whichever position they are, for not complying with its guidelines.
The directives came while hearing a suo moto criminal PIL (No. 614/2017) regarding Rs25 crore losses caused to the UCO Bank due to alleged embezzlement of funds by its own officers. The HC had appointed Rajnish Vyas as amicus curiae to plead the PIL.
While adjourning the hearing by three weeks, the bench told the top bank that its earlier affidavit was “unsatisfactory” and asked it to file a detailed reply on action it has taken or proposed to take against the UCO bank officials concerned.
“The RBI is required to play the role of a real sentinel. Therefore, we expect that its reply would reflect its concern about prevention of such frauds and scams and taking punitive action against those responsible for it,” the bench said.
The judges noted that the RBI doesn’t have any independent machinery to carry out the investigation into any fraud, but it can certainly take penal action under the powers conferred upon it in Banking Regulation Act, 1949, and the RBI Act, 1934, against the erring banks and also the officials concerned.
“On going through various provisions made in Banking Regulation Act, 1949, one would not require any time to grasp the fact that the powers of RBI in controlling the affairs of the banks are enormous. That’s the reason why it is called the central bank having the supervision and control over all the banks and financial institutions engaged in the business of banking in India,” the judges said.
Way paved way for confiscating MSCB assets
The Nagpur bench of the High Court on Thursday vacated the stay on confiscation of movable assets of Maharashtra State Cooperative Bank (MSCB) in Mahal. The orders came while hearing a bank’s petition for staying the confiscation orders in a case filed by Bhandara’s Wainganga Cooperative Sugar Mill workers alleging Rs13.89 crore misappropriation by its officials.
The case was listed before a division bench comprising justices Nitin Jamdar and Anil Kilor, which rejected the bank’s contention.
Earlier, the Supreme Court on December 4, 2019, had ordered recovering the amount from the bank within six months.
[ad_2]
Financial Express is now on Telegram.