CIC Slaps Show-Cause Notice On RBI Governor For Non-Disclosure Of Willful Defaulters' List
The Central Information Commission (CIC) has reportedly slapped a show-cause notice on Reserve Bank Of India (RBI) governor Urjit Patel over the issue of non-disclosure of the wilful defaulters’ list. Additionally, the CIC has also asked the Prime Minister’s Office, the finance ministry and the Reserve Bank of India (RBI) to make former governor Raghuram Rajan’s letter on bad loans public.
Why did CIC send a show-cause notice
According to the Hindustan Times, the CIC has expressed displeasure over the fact that Patel has refused to disclose the names of the wilful defaulters who have taken loans of Rs 50 crore and above, in spite of a Supreme Court order. It has also asked as to why a maximum penalty shouldn’t be imposed on him for “dishonouring” the court’s verdict. Reportedly, the apex court had upheld the-then information commissioner Shailesh Gandhi’s decision of disclosing names of such wilful defaulters.
The CIC said, “It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein. The baseless and unsubstantiated argument of the RBI that the disclosure would hurt the economic interest of the country is totally misconceived,” reported Business Today. Moreover, it said that there isn’t any match between what the Governor and the Deputy Governor has said about the inspection reports being maintained with impunity and the information on their website on RBI.
Speaking at the Central Vigilance Commission (CVC), on September 20, Patel had said that the guidelines on vigilance, issued by the CVC, were aimed at achieving greater transparency. The abovementioned statement by the CIC is a possible jibe at Patel’s earlier comments on vigilance. Information Commissioner Sridhar Acharyulu has demanded answers from the governor before November 16.
Viral Acharya on RBI’s autonomy
Recently, on October 26, Reserve Bank Of India (RBI) deputy governor Viral Acharya, during a speech, raised the contentious issue of the central bank’s independence and its lack of power. Just days after his remarks, the Reserve Bank Employees Association sided with Acharya and said that “undermining the central bank is a recipe for disaster”, reported The Economic Times.
The tussle between the central bank and the government is nothing new. Acharya in his speech said, “governments that do not respect central bank independence will sooner or later incur the wrath of financial markets, ignite an economic fire, and come to rue the day they undermined an important regulatory institution.”
In his speech during the AD Shroff memorial lecture at Mumbai, Archarya spoke against the government’s pressure to relax asset qualification norms reported The Times Of India. He also thanked Patel for suggesting him to explore the topic of independence at the event.
However, recent media reports have suggested that after the breakdown of the relations with the government, Urjit Patel may consider resigning from his post as the governor of RBI. The Economic Times had reported that within the recent weeks, the government had invoked the never-before-used Section 7 of the RBI Act and has also sent a number of letters to the governor on multiple issues including liquidity for non-banking financial companies (NBFCs).