SC issues notice to RBI on contempt petition

The contempt petition was moved with the allegation that RBI was withholding certain data sought under RTI by Forex Derivatives Consumer Forum (FDFC) formed of aggrieved apparel exporters who sustained more than Rs. 300 crore loss after purchasing ‘exotic forex derivative products’ extended by banks, despite the upholding of Central Information Commissioner’s (CIC) order by the apex court itself.

The CIC had ordered the RBI to provide the entire information sought by the Tirupur exporters regarding the derivatives scam.

Once the earlier SC verdict of upholding the CIC’s order came, FDFC’s economic advisor S. Dhananjayan had sought data afresh under RTI.

The information sought include copies of show cause notices issued by RBI to 19 banks for selling ‘unsuitable derivative products’ that led to penalty on the said banks for irregularities in sale of the ‘exotic forex derivatives’ to hedge the currency fluctuations in 2007-08 fiscal and also inspection reports by RBI officials that led to the detection of irregularities.

Key data

“Though RBI gave bank-wise losses details, it is still not giving the key data with regard to inspections. This data is vital for us in the ongoing case against the sale of said ‘unsuitable type of derivatives’ going on in the court and hence, the contempt petition,” Raja Shanmugam said.

Lawyers Prashant Bhushan and Govind appeared for Tirupur exporters and the Supreme Court bench of Justices Madan Lokur and Adarsh K. Goel ordered issuance of notices. #casansaar (The Hindu)