Citing a Reserve Bank of India (RBI) notification, senior Congress leader Jairam Ramesh on Monday said that the State Bank of India should declare Gujarat State Petroleum Corporation (GSPC) as bankrupt by 5 p.m.
The Congress leader in a press conference held in New Delhi said that on February 12, 2018, RBI issued a circular stating any company that owes more than ₹20,000 crore to banks, should be declared bankrupt within 180 days.
"GSPC's highest debt is from SBI. According to RBI's notification, SBI should declare GSPC as bankrupt by 5 p.m. today (Monday)," said Ramesh.
During Prime Minister Narendra Modi's term as Gujarat Chief Minister, the GSPC was cited as one of the biggest successful Gujarat Model and was shown as an example for other states in India.
"In 70 years, for the first time the Central government has filed an affidavit in High Court against RBI, with the only intention of saving GSPC," said Ramesh.
Even after the sanction of ₹20,000 crore to GSPC, no oil or gas has been extracted from GSPC, he said.
"The company is in bankruptcy now and this is a burden on taxpayers and public has been lied to," he added.
SBI has to take action under the law. In 2016, Parliament passed Insolvency and Bankruptcy Code – according to that law, the prime mover has to be - in this case the main Bank - the State Bank of India – has to initiate action under the Insolvency and Bankruptcy Code
Responding to a question as to why did the Central Government go to Allahabad High Court, Shri Jairam Ramesh said the Centre did not move Allahabad High Court – independent Power Producers – private power companies of which Adani Power is one of the most prominent power company, approached the Allahabad High Court for a stay and review of the RBI’s circular. The Allahabad High Court asked the Centre for its response.
“On August 2, 2018, the Centre said, they are not in agreement with the circular, and want this 180 days limit, which ends today, to be extended by another 180 days. This is the first time in independent India that Government of India challenged a circular of the Reserve Bank in a court. There are always differences between RBI and the Government. (but the matter has never gone to the court). These private producers of power were encouraged by the Government of India to go to the Allahabad High Court to challenge this circular. I am saying this with full sense of responsibility.”
Responding to another question, Jairam Ramesh gave details of how much GSPC owe to various banks, “SBI is the lead Bank – They owe SBI ₹1,200 crore; they owe Bank of India ₹470 crore; they owe Bank of Baroda ₹526 crore; i.e. let us take the Bank – the Prime Minister’s favourite Bank – Punjab National Bank – PNB – they owe ₹292 crore,... Indian Bank ₹764 crore; so total loan outstanding as of 31.03.2018 is ₹12,519 crore,” he said.
On the question of RBI declaring GSPC bankrupt, Jairam Ramesh said the SBI has to take action under the law. In 2016, Parliament passed Insolvency and Bankruptcy Code – according to that law, the prime mover has to be - in this case the main Bank - the State Bank of India – has to initiate action under the Insolvency and Bankruptcy Code.
On the question of Dr. Urijit Patel holding position in RBI, Jairam Ramesh said “I don’t want to say anything on the Governor of RBI. He was a Member on the Audit Committee of Board of GSPC, that is a fact. All I am saying(mentioning) is the February 12 circular of Dr Urijit Patel and his colleagues.”
“It is inconceivable that the government would not have known about such an important circular, particularly this government, which keeps a watch on everybody’s movements, they would have known that the circular was coming out but as I said, never before, has the Reserve Bank of India circular been challenged, and challenged privately, it is being challenged, there are differences of opinion but challenged publicly in a court of law, never - never. I think this demonstrates the government’s approach to Institutions. They have destroyed Institutions, they destroyed RBI after demonetisation and with this circular, this is the ‘Antim Sanskar’ ‘Last Rites’ – of the Reserve Bank of India. If this circular is not implemented, then I am afraid the RBI has lost whatever little autonomy - whatever little credibility - it had,” Ramesh said.
Jairam Ramesh’s press conference can be watched here:
With IANS inputs