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Is Shaktikanta Das worried about rising trend of RBI being sued?

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At the press conference following the monetary policy decision on April 4, Reserve Bank of India Shaktikanta Das said parties affected by the central bank’s decisions were free to go to the court, as ordained by their democratic right.

The governor was asked by a reporter about the rising trend of parties suing the Reserve Bank, and whether the trend worried him, as it could dim the ‘aura of invincibility’ of the central bank.

“Everyone is entitled to challenge the decision of any authority in a court of law. The Reserve Bank cannot be an exception to this,” Das said.

Recently, various parties have taken the central bank to court over several issues. Kotak Mahindra Bank took the RBI to court in December 2018 after the latter barred the promoter from paring their stake through a complex issue.

Besides, Essar and various cryptocurrency companies sued the RBI over decisions that affected them.

In the most high-profile case, the Supreme Court recently struck down a circular by the RBI on NPAs after power producers challenged the decision.

At the press conference, Das said that RBI would float another circular keeping the SC ruling in mind.

The central bank chief also said that the RBI had started undertaking a “wider stakeholder consultation” and taking decisions based on that.

Das added that while proposing many policies, a draft circular is placed on the RBI website before a final decision is taken. However, there are certain regulatory aspects that cannot be placed in the public domain and get comments because of its criticality.

The RBI takes certain decision based on its “wisdom” and “internal consultations” with experts and stakeholders, he said.

 



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