Rajya Sabha MP and BJP member Subramanian Swamy has asked for a CBI enquiry into the Reserve Bank of India’s functioning, and has asked the government to put Lakshmi Vilas Bank merger with DBS Bank India on hold.
In a letter to the prime minister, Swamy wrote, “…requested for an investigation by CBI into the functioning of RBI, especially in light of the fact that CBI has never found it necessary even to investigate any office of the RBI in any of the high-profile scams.”
He said RBI’s functioning must remain one of the government’s top priorities and urged the Centre to send the RBI Governor on indefinite leave till the investigations are over.
He also asked the prime minister to reconstitute RBI Board and advisory committees.
“Functioning of RBI as a regulator of banks and NBFCs leaves a lot to be desired,” said Swamy.
The BJP member also sought to put the LVB-DBS merger on hold in order to facilitate a forensic audit of the takeover of the assets of LVB by DBS.
Swami called for an examination of the allegations against the DBS made internationally and in the company’s home country, Singapore, on money laundering.
In his letter Swamy said, “…what is amazing is that RBI had sought objections from stakeholders which were to be filed by the close of business hours on November 20, 2020, effectively giving less than 72 hours to them to respond.”
He noted that several stakeholders, notably the bond and shareholders, had raised objections to the scheme.
However, the RBI forwarded the Draft Scheme for Cabinet approval in great haste on November 25, without factoring any such objections.
Subsequently the scheme was notified and came into effect on November 27.
Swamy alleged that the haste with which RBI carried out the scheme of Amalgamation, the short-shrift given to the well-taken objections of the stakeholders, the unprecedented and unreasonable terms under which the bond and shareholders’ interest have been written off, and the arbitrary manner in which DBS Bank was chosen without any standard operating procedure in such proposals and raise serious questions on RBI’s functioning and integrity.
He added that despite the fact that the RBI is armed with extraordinary regulatory, supervisory and monitoring powers vis-a-vis the banks under the Banking Regulation Act, and its nominees are represented in the Board of all Banks including the LVB, banks after banks have suffered losses and rise in NPA.
“….a serious flaw in the functioning of the RBI and more particularly the lack of accountability,” said Swamy.