Independent probe into officials’ alleged role in scams not feasible, RBI tells SC

The Reserve Bank of India has told the Supreme Court that separate and independent investigations into the alleged role of its officials in banking and financial scandals were not feasible. Responding to a petition filed by BJP leader Subramanian Swamy and advocate Satya Sabharwal, the banking regulator said it has an internal mechanism in place to examine any employee’s conduct if there is any specific allegation or prima facie evidence with respect to the person’s actions or omissions.

The central bank termed the allegations in the petition as “fallacious and non-substantiated”, and said it should be dismissed with heavy costs. Most of the scams referred to in Independent Probe into Officials’ Alleged Role in Scams not Feasible, RBI Tells SC the petition were already under the investigation of the CBI or the Enforcement Directorate, and the Central Vigilance Commission also oversees the conduct of the employees, the RBI said. It also said the petition was riddled with factual and legal inaccuracies.

The petition has been filed on an “experimental basis” since no ex-facie involvement, complicity or negligence on part of the central bank has been highlighted, it said. Taking RBI’s response on record, a division bench comprising Justices BR Gavai and Vikram Nath gave the petitioners three weeks to file their rejoinder.


The court had in October issued notices to the CBI and the RBI on the petition that had highlighted a spate of financial and banking frauds and their impact on India’s economy. According to the petition, despite having wide powers, the RBI has failed to protect the interests of stakeholders including depositors, investors and shareholders, resulting in a loss of faith in the banking system.

The petitioners have sought probes into various scandals including those involving Punjab National Bank, Kingfisher Airlines, Yes Bank and Lakshmi Vilas Bank.