“We have declared the RBI circular ultra vires," Nariman said. The court said provisions of Section 45L(3) of the RBI Act (power of RBI to call for information from financial institutions and to give directions) were not adhered to in framing the Feb 12 circular. In September, the Supreme Court granted interim relief to stressed power firms, directing lenders to maintain status quo on the RBI Feb 12 circular for banks to resolve these cases within 180 days. The court directed that all pleas filed by RBI related to the 12 February circular should be transferred to it. Vishwanathan defended the Feb 12 circular.

Source: Mint April 02, 2019 19:41 UTC