Paridhi Arya
Published on April 26, 2022 at 13:30 IST
The Bench of Chief Justice of India N V Ramana and Justice Hima Kohli refused to Stay the proceedings pending in High Courts. The opinion of Bench is that first of all High Courts should decide the Matter in hand and then Supreme Court will examine the Plea of Reserve Bank of India.
Supreme Court directed Bombay High Court to give decision in two weeks.
Reserve Bank of India has filed Petition to consolidate the Pleas of cooperative banks filed in different High Courts regarding application of Banking Regulation Act in appointment of CEOs, Directors and MDs.
Rakesh Dwivedi Senior Advocate appearing for RBI has submitted to the Bench that main reason behind Banking Fraud is collusion of management with fraudster and so it is important to regulate it, over decades Banking Regulation is applicable to cooperative banks.
He contended that the cooperative banks are allowed to set up with deposit of 5 Lakh Rupees to cater the farmers and agriculturists and it will be jeopardize the Rural Financial System if Reserve Bank of India will not have any control over appointment of management.
Liz Mathew the Counsel of Reserve Bank of India said “In an overwhelming large number of cases where the Urban Cooperative Banks (UCB) are in financial difficulties, the primary reason is managerial failure either due to the incompetence or complicity on account of vested interests.”