- November 22, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 32 lakh on a public sector bank for non-compliance with certain provisions of Reserve Bank of India.
- The orders released had minimum details about the violations.
- It has drawn criticism from various quarters and a call for the setting up of an appellate court like the Securities Appellate Tribunal (SAT).
- The Financial Sector Legislative Reforms Commission (FSLRC), headed by Justice BN Srikrishna earlier recommended a financial sector appellate tribunal for all the regulators including the RBI.
Need for transparency–RBI
- Customers and investors of banks have only sparse access to information on non-compliance of RBI directions by banks.
- Unlike in the case of other financial regulators, when RBI passes orders for any irregularity at a bank, they usually make references to certain clauses or sub-clauses of the regulation under which the non-compliance has happened.
- RBI provides details only to the entity being penalized for violation.
- While SEBI- passes ‘speaking orders’ that are long, explanatory and give details on all aspects of the issue, the party can also challenge the Sebi’s decision in the Security Appellate Tribunal.
- Currently, the RBI is the only regulatory institution which doesn’t have an appellate body.
Some important appellate body:
- The National Company Law Appellate Tribunal (NCLAT) under Section 410 of the Companies Act, 2013.
- The tribunal is responsible for hearing appeals from the orders of National Company Law Tribunal
- The tribunal also hears appeals from orders issued by the Insolvency and Bankruptcy Board of India under Section 202 and Section 211 of IBC.
- It also hears appeals from any direction issued, decision made, or order passed by the Competition Commission of India (CCI) and the National Financial Reporting Authority (NFRA).
- Debts Recovery Appellate Tribunal-orders of the Debt Recovery Tribunal are appealable before the Debts Recovery Appellate Tribunal.
- Securities Appellate Tribunal hears appeals against the following orders:
- Insurance Regulatory and Development Authority of India (IRDAI)
- Pension Fund Regulatory and Development Authority (PFRDA)
- Securities and Exchange Board of India
- The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) hears appeals against orders and decisions passed under
- the Customs Act, 1962 and Central Excise Act, 1944.
- It also has appellate jurisdiction in Anti Dumping matters.
- India’s Income Tax Appellate Tribunal (ITAT) is the second appellate authority under the direct taxes and first independent forum in its appellate hierarchy.
- Armed Forces Tribunal-Any appeal arising from court-martial orders, findings, or sentences.
- Appellate Tribunal for Electricity- is created as a statutory and autonomous body under the Electricity Act, 2003 to hear complaints, appeals or original petitions against the orders of the State Regulatory Commission, The Central Regulatory Commission, Joint Commission or the Adjudicating officer.