Govt Opposing RBI For The First Time In Court, Says Jairam Ramesh

The Logical Indian Crew India

August 29th, 2018 / 2:03 PM

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Image Credits: Moneycontrol, IndiaTV News

For the first time in history, the central government is opposing Reserve Bank of India (RBI) in High Court alleged senior Congress leader Jairam Ramesh. As reported by The Hindu, in a press briefing Jairam Ramesh has said, “This is the first time in Independent India in 70 years that the Government of India challenges a circular of RBI in court. There are always differences between the Government and RBI, but it never reached a court of law.”


Central Government files affidavit

The Congress Leader is alleging that the BJP led central government is saving the Gujarat State Petroleum Corporation from being declared bankrupt under Insolvency and Bankruptcy Code 2016 (IBC). RBI has released a circular in February 2018, stating that any company which has more than Rs. 2000 Crore of bank loans and dues will be declared bankrupt, in case they failed to clear the dues within 180 days. Jairam Ramesh said, “All efforts are being made to ensure that the GSPC is not declared bankrupt because if it is done, it will be a blemish on Prime Minister Modi’s record.”

In the press conference, he referred to the affidavit filed by the central government on August 2, 2018, in Allahabad High court against RBI’s decision. According to India Today, many private companies are already opposing RBI’s circular because the period provided for clearing dues is too short, and the central government is backing their petition with its affidavit.

“This demonstrates the Government’s approach to its institutions. If the RBI circular is not implemented, it will be performing the “antim sanskar” (last rites), and RBI would lose all its credibility and autonomy” said Congress leader.


CAG reports GSPC took a loan of Rs 20,000 Crore

According to Times Of India, the Comptroller and Auditor General (CAG) report revealed that GSPC took loans of Rs. 20,000 crore from 15 banks and further rented out contracts for drilling to 4-5 companies. According to Mr Jairam, the company has spent all the money without doing any actual work, and GSPC is in such a state that it has to be declared bankrupt under IBC. However, he claimed that the central government is trying hard to protect the sinking ship.

He also said that “Last year in August under PM’s pressure ONGC was forced to buy GSPC gas block and GSPC got a relief of about Rs 8000 crore, but it still owes 12,000 crores to banks.”


Also Read: [Video] Often Wondered What RBI Exactly Does? This Video Explains In Just 5 Minutes


Contributors

Written by : Santosh Kumari (Intern)

Edited by : Shraddha Goled

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