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Subramanian Swamy asked Prime Minister Narendra Modi to order a CBI-led probe into the RBI’s alleged flouting of its own rules while granting 10 small finance bank licences. Photo: PTI
Subramanian Swamy asked Prime Minister Narendra Modi to order a CBI-led probe into the RBI’s alleged flouting of its own rules while granting 10 small finance bank licences. Photo: PTI

Subramanian Swamy escalates campaign against Raghuram Rajan

Subramanian Swamy alleges 10 entities were granted 'in-principle approval' by the RBI despite their failure to meet the eligibility criteria

New Delhi: BJP leader Subramanian Swamy on Wednesday asked Prime Minister Narendra Modi to order a CBI-led probe into the Reserve Bank of India’s (RBI)’s alleged flouting of its own rules while granting 10 small finance bank licences.

Seeking action against RBI officials, including governor Raghuram Rajan, the Rajya Sabha MP alleged that the 10 entities were granted ‘in-principle approval’ by the RBI despite their failure to meet the eligibility criteria set out in the central bank’s guidelines, including those regarding foreign holding. Swamy, who had earlier written to the Prime Minister seeking the dismissal of Rajan for failing to lower interest rates and boost the economy, said that the RBI has “failed to perform the duty diligently" in grant of these approvals and there seemed to be “on the face of it, a mala fide negligence."

He also sought to link the grant of the licences to possible money laundering of funds belonging to politicians and bureaucrats “friendly" to a former finance minister who still “dominates" high posts in the ministry.

Swamy has said that the 10 licences granted in the private sector to small finance banks do not fulfil the criterion laid down by RBI “which confirms the malice in the RBI decision."

The BJP MP said the guidelines for grant of licences were “brazenly flouted" in granting approval.

“Therefore, these illegal approvals attract Section l3(1)(d)(iii) of the Prevention of Corruption, Act (1988). The present governor of RBI is thus answerable in a probe into this matter," he said in his letter to the Prime Minister. “You may therefore consider a probe by the CBI-led SIT (Special Investigation Team), and have RBI officials including the governor of RBI interrogated for this scam," Swamy wrote.

In his letter he also alleged that it is clear from the annual reports of the 10 banks that none of them are a Non-Banking Financial Company (NBFC), Micro Finance Institution (MFI) or a Local Area Bank (LAB) and “not even a single company of short-listed applicants fulfils all the criteria laid down in the guidelines for SFB (Small Finance Bank) which confirms malice in the RBI decision".

Swamy also said that looking into the credentials of successful applicants, it is apparent that most of these applicants’ foreign holdings are contrary to the criteria as set out by RBI for SFBs.

“Most of successful applicants are in fact controlled by foreign entities," he alleged, adding that these foreign entities are common for all the applicants and are run by “a specific community." Swamy has also alleged that in order to benefit NBFCs and MFIs certain guidelines were created providing exception to them and dubbed them as “mala fide."

“Five years for promoters which would be assessed by the RBI as ‘fit and proper’ are set against no experience eligibility for NBFCs, MFIs and LABs indicates an interest of benefiting these entities," he said. PTI

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