RBI seeks transfer of multiple pleas related to co-operative banks

The Reserve Bank of India on Monday asked the Supreme Court to transfer to itself around two dozen petitions pending before various high courts challenging the validity of the 2020 law and the consequential circular that brought all cooperative banks under the regulator’s supervision.

A bench presided over by Chief Justice N V Ramana sought a response from the petitioners before the high courts but refused to stay the proceedings pending before various high courts of Bombay, Madras, Kerala, Karnataka, Chhatisgarh, Rajasthan, Uttrakhand, Punjab and Haryana, Allahabad, Andhra Pradesh, Madhya Pradesh, etc.

The bench indicated that it may transfer all the petitions to the Bombay High Court, where the RBI headquarters is located.

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The counsel, however, insisted that the case should be heard by the top court itself.

Appearing for RBI, senior advocate Rakesh Dwivedi and counsel Liz Mathew, submitted that the ordinance was passed only to bring the banks under the banking regulations and protect the interest of the public.

They said the matter required immediate attention or the “financial system would become unworkable.”

RBI sought transfer of all the petitions to the top court as they all deal with the legality of the Amendment Act, including the extension of provisions relating to appointments of the board of directors and CEO/MD to co-operative banks.

“Though the co-operative banks have been incorporated under the different state Co-operative Societies Acts, the common cause involved for filing all these writ petitions is challenging the constitutionality of the Amendment Act and the consequential Circular issued by RBI. Therefore, transfer of these will prevent multiplicity of proceedings and will also prevent inconsistency in decisions by the HCs,” RBI said in its transfer petition before the HC.

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