The history of the contentious ‘RBI Act Section 7’
6 years, 2 months ago

The history of the contentious ‘RBI Act Section 7’

Live Mint  

Mumbai: Section 7 of The Reserve Bank of India Act, 1934, became a contentious issue after the tension between the central bank and government turned into a public spat over the last few days. According to the RBI Act’s Section 7, “the central government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest”. The issue of invoking Section 7 of RBI Act came up during the hearing of Allahabad high court in a case filed by the Independent Power Producers Association of India challenging RBI’s 12 February circular. The high court, in August, said the government could issue directions to RBI under Section 7 of RBI Act.

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History of this topic

Demonetisation Not Illegal Merely Because Proposal Originated From Central Govt; No Breach Of Sec 26(2) RBI Act : Supreme Court
2 years ago

Demonetisation Not Illegal Merely Because Proposal Originated From Central Govt; No Breach Of Sec 26(2) RBI Act : Supreme Court

Live Law  

The Supreme Court in its judgment upholding validity of demonetisation, observed that the word “recommendation” in Section 26 of RBI Act would mean a consultative process between the Central Board of Reserve Bank of India and the Central Government. Section 26 of the RBI Act reads thus: On recommendation of the Central Board, the Central Government may, by notification in …

Demonetisation Decision Making Process Lawful, Supreme Court Holds By 4:1 Majority; Justice Nagarathna Dissents
2 years ago

Demonetisation Decision Making Process Lawful, Supreme Court Holds By 4:1 Majority; Justice Nagarathna Dissents

Live Law  

The Supreme Court Constitution Bench has upheld by 4:1 majority the decision taken by the Union Government six years ago to demonetise the currency notes of Rs. Court cannot supplant the wisdom of executive with its wisdom.” The bench further held that Section 26 RBI Act, which empowers Centre to demonetize any series of bank notes of any denomination, can …

‘For our satisfaction’: SC orders Centre, RBI to produce demonatisation files
2 years, 1 month ago

‘For our satisfaction’: SC orders Centre, RBI to produce demonatisation files

Hindustan Times  

The Supreme Court on Wednesday directed the ministry of finance and the Reserve Bank of India to produce files pertaining to the government’s November 2016 decision to outlaw currency notes of ₹500 and ₹1,000. The bench also told the government’s top law officer Attorney General R Venkatramani that it wanted to examine the “relevant records” of RBI and Centre. Chidambaram …

Supreme Court directs Centre, RBI to submit records behind demonetisation decision
2 years, 1 month ago

Supreme Court directs Centre, RBI to submit records behind demonetisation decision

The Hindu  

The Supreme Court on December 7 directed the Centre and the RBI to place on record the “relevant records” relating to the government’s 2016 decision to demonetise currency notes of ₹1,000 and ₹500 denomination for its perusal. Reserving its verdict on a batch of pleas challenging the Centre’s decision, a five-judge Constitution Bench headed by Justice S.A. Nazeer heard the …

Madhya Pradesh High Court Stays RBI Circular On Urban Cooperative Banks
3 years, 4 months ago

Madhya Pradesh High Court Stays RBI Circular On Urban Cooperative Banks

Live Law  

The Madhya Pradesh High Court has stayed a circular issued by the Reserve Bank of India on June 25 which laid down several conditions related to Urban Coopeartive Banks.A division bench comprising Chief Justice Mohammad Rafiq and Justice Vijay Kumar Shukla passed the interim order on September 3 while issuing notice on a writ petition filed by Mahanagar Nagrik Sahkari …

RBI Is 'State' Under Article 12; Private Banks Discharging Public Functions Amenable To Writ Jurisdiction: Calcutta High Court
3 years, 10 months ago

RBI Is 'State' Under Article 12; Private Banks Discharging Public Functions Amenable To Writ Jurisdiction: Calcutta High Court

Live Law  

The Calcutta High Court has held that th Reserve Bank of India is "State" under Article 12 of the Constitution and thus, a writ petition is maintainable against it. The Single Bench ruled, "Since the Reserve Bank of India is an instrumentality of the State, it comes squarely within the meaning of "State" as contemplated in Article 12 of the …

RBI's Intention Is To Maintain Status Quo On Account Classification As On March 1 During Moratorium Period : Delhi HC [Read Order]
4 years, 9 months ago

RBI's Intention Is To Maintain Status Quo On Account Classification As On March 1 During Moratorium Period : Delhi HC [Read Order]

Live Law  

The Delhi High Court has provided interim relief to an account from being declared a Non Performing Asset by the Punjab & Sind Bank, in light of the moratorium allowed by the RBI by its circular issued on March 27. While passing the interim order, the bench expressed agreement with the view expressed by another bench in the case Ananth …

What steps taken to help PMC Bank depositors, Bombay HC asks RBI
5 years, 2 months ago

What steps taken to help PMC Bank depositors, Bombay HC asks RBI

Live Mint  

The Bombay High Court on Monday sought to know from the Reserve Bank of India what steps it has taken to protect the interests of depositors of the crisis-hit Punjab and Maharashtra Cooperative Bank. A division bench of Justices S C Dharmadhikari and R I Chagla was hearing a bunch of petitions filed by the bank depositors, challenging restrictions imposed …

RBI's revised guidelines for resolution of stressed assets likely before 23 May; poll code may not impact issuance of new rules
5 years, 8 months ago

RBI's revised guidelines for resolution of stressed assets likely before 23 May; poll code may not impact issuance of new rules

Firstpost  

Against the backdrop of the Supreme Court quashing an RBI circular, issued on 12 February, 2018, a revised set of rules is under works and would be released soon, they said. New Delhi/Mumbai: The Model Code of Conduct for the Lok Sabha polls is unlikely to have any bearing on issuance of a revised framework for resolution of stressed assets …

RBI’s revised guidelines for resolution of stressed assets likely before May 23
5 years, 8 months ago

RBI’s revised guidelines for resolution of stressed assets likely before May 23

Live Mint  

New Delhi: The Model Code of Conduct for the Lok Sabha polls is unlikely to have any bearing on issuance of a revised framework for resolution of stressed assets by the Reserve Bank of India and the guidelines are expected to be announced before May 23, sources said. Against the backdrop of the Supreme Court quashing an RBI circular, issued …

RBI to issue revised circular on bad loan resolution: Shaktikanta Das
5 years, 9 months ago

RBI to issue revised circular on bad loan resolution: Shaktikanta Das

Live Mint  

Mumbai: The Reserve Bank of India will issue a revised circular for resolution of stressed assets after its 12 February 2018 norms were struck down by the Supreme Court earlier this week, RBI governor Shaktikanta Das said on Thursday. The RBI will take steps in light of the court order, including issuance of a revised circular, for expeditious and effective …

RBI Feb 12 circular quashed. All eyes now on monetary policy
5 years, 9 months ago

RBI Feb 12 circular quashed. All eyes now on monetary policy

Live Mint  

Mumbai/New Delhi: The Supreme Court on Tuesday quashed RBI's 12 February circular that had set strict norms for bad loan resolution, easing the concerns of some debt-laden companies and upending India’s fledgling bankruptcy process. The RBI circular directed banks to refer defaulters to bankruptcy courts if they were unable to find a resolution plan within 180 days for stressed accounts …

Supreme Court strikes down RBI's 12 February circular on bankruptcy proceedings, declares it illegal
5 years, 9 months ago

Supreme Court strikes down RBI's 12 February circular on bankruptcy proceedings, declares it illegal

Firstpost  

Last month, the RBI had maintained that there was no dilution in its stand with regard to 12 February circular on stressed assets recognition and resolution. In a major relief to stressed power, sugar and infrastructure firms, the Supreme Court on Tuesday quashed the Reserve Bank of India’s 12 February, 2018 circular on bankruptcy proceedings and declared it ultra vires_,_ …

Much ado about nothing: Demystifying the needless hue and cry over the RBI
6 years ago

Much ado about nothing: Demystifying the needless hue and cry over the RBI

Op India  

“The only function of economic forecasting is to make astrology look respectable,” remarked the legendary Economist John Kenneth Galbraith. Whoever in Congress thought of RBI autonomy and role in influencing election outcome doesn’t have enough knowledge to even make credible sounding arguments. According to the RBI Act’s Section 7, “the central government may from time to time give such directions …

P Chidambaram attacks govt over rocky ties with RBI, says FM and central bank governor worked closely under UPA
6 years, 1 month ago

P Chidambaram attacks govt over rocky ties with RBI, says FM and central bank governor worked closely under UPA

Firstpost  

Hyderabad: The finance minister and RBI governor used to work closely when the UPA was in power unlike under the current government, Congress leader P Chidambaram said on Wednesday, slamming the Modi dispensation over its rocky ties with the central bank. He also questioned the government’s high GDP growth number when vital economic indicators like household savings, industrial credit, export …

Govt refuses to yield on Section 7 of RBI Act
6 years, 2 months ago

Govt refuses to yield on Section 7 of RBI Act

Live Mint  

New Delhi: The Union government will not yield ground on its right to issue a directive to the Reserve Bank of India, even as it claimed that contentious issues between the two should be resolved at the board meeting of the central bank on 19 November. Tensions escalated between RBI and the government after the latter wrote three letters to …

Govt to continue pressing Reserve Bank of India for relaxing norms, funds to boost lending
6 years, 2 months ago

Govt to continue pressing Reserve Bank of India for relaxing norms, funds to boost lending

Firstpost  

The reports of rift between the central bank and the government surfaced last month following which the finance ministry reportedly started discussion with the RBI under the never-used before Section 7 of the RBI Act. New Delhi: Keeping up the heat on the Reserve Bank of India, the government will continue to press the central bank to relax norms to …

RBI autonomy row: Govt cites never-used powers of issuing directions for resolving issues with central bank
6 years, 2 months ago

RBI autonomy row: Govt cites never-used powers of issuing directions for resolving issues with central bank

Firstpost  

Finance ministry and RBI are said to have differed on the central bank’s handling of weak public sector banks, tight liquidity in the market and ways of resolving bad loans in the power sector. Section 7 of the RBI Act empowers the government to issue directions to the central bank, after consultation with RBI Governor, on issues that it considers …

Govt may have invoked law to issue directions to RBI
6 years, 2 months ago

Govt may have invoked law to issue directions to RBI

Live Mint  

New Delhi: The crisis between the government and the Reserve Bank of India seems to be escalating with the government reportedly invoking Section 7 of the Reserve Bank of India Act in an unprecedented move. Under Section 7 of the RBI Act of 1934, “the central government may from time to time give such directions to the bank as it …

Will govt invoke Section 7 of RBI Act? All you need to know about this never-before-invoked Act
6 years, 2 months ago

Will govt invoke Section 7 of RBI Act? All you need to know about this never-before-invoked Act

Firstpost  

Section 7 empowers the central government to give directions to the RBI, after consultation with the Governor of the central bank, as it may consider necessary in the public interest. There have been reports that the government may consider invoking Section 7 of the Reserve Bank of India Act allowing it to issue directions to the central bank governor on …

Government says consultations on with RBI, remains mum on Section 7
6 years, 2 months ago

Government says consultations on with RBI, remains mum on Section 7

India Today  

Neither denying nor accepting, the Ministry of Finance has issued a statement saying that extensive consultations on several issues take place between the government and the RBI and only final decisions are communicated. For the purpose, extensive consultations take place between the government and the RBI from time to time. The ministry also said in the statement that the government …

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