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The Reserve Bank of India (RBI), hiding behind its role as India’s monetary authority, has escaped all external scrutiny and accountability regarding its second role—as regulator of banking and finance companies—which is marked by repeated failures. Until a few years ago, these failures were largely hidden by force-merging failed institutions with public sector banks (PSBs). This trick is no longer possible with non-performing loans of banks soaring past Rs 10 lakh crore and the collapse of several ‘systemically important’ shadow banks exposing the high cost of failed supervision.
Maverick politician and economist Dr Subramanian Swamy has filed a public interest litigation (PIL) in the Supreme Court, seeking a probe by central bureau of investigation (CBI) into the ‘illegal acts of RBI officials’, leading to various scams. The petition lists 10 big scams and says, “not a single RBI official has been brought to justice despite RBI retaining the power to monitor, regulate, supervise, audit and direct the functioning of all banking companies in India.” Dr Swamy’s petition is brief and is focused on making RBI officials subject to CBI investigation. RBI’s failures, argues the petition, has