Govt needn't consult RBI for directives on bank functioning: SC
The Supreme Court has ruled that it is not always necessary for the Central government to consult the Reserve Bank of India to issue guidelines on functioning of banks.
By TNN |
NEW DELHI: The Supreme Court has ruled that it is not always necessary for the Central government to consult the Reserve Bank of India to issue guidelines on functioning of banks.
Laying down of the terms and conditions of service of the employees of the bank do not necessarily involve any policy decision, and in such situation, consultation with the central bank is not required, the court observed while setting aside a judgement of the Andhra Pradesh High Court.
The high court had said that Section 8 of the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 lays down that the bank shall be guided by such directions with regard to matters of policy involving public interest, as the Central government may issue after consultation with the RBI governor.
The case pertains to a petition filed by the Andhra Bank Officers.According to the circular, travel between office and residence should not be treated as official journeys and no reimbursement for such travel be made. Against the High Court order, Andhra Bank had appealed to the apex court.
A bench comprising Justice SB Sinha and Justice LS Panta said: ���A regulation framed for the purpose of laying down the terms and conditions of service of the employees of the bank do not necessarily involve any policy decision involving public interest. Each word used in Section 8 must be given effect to. It is separate and distinct from the regulation making power���.
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