The Delhi High Court has granted permission to former Rajya Sabha member Subramanian Swamy to withdraw his public interest litigation (PIL) seeking the constitution of an expert committee to investigate the transfer of a stress asset portfolio worth Rs 48,000 crore from Yes Bank to JC Flowers Asset Reconstruction Company.
A bench of Acting Chief Justice Manmohan and Justice Mini Pushkarna noted that there were no objections from the involved parties regarding the withdrawal of the petition and subsequently canceled any further hearings on the matter.
“The present writ petition is dismissed as withdrawn,” the bench stated.
The court acknowledged that the Reserve Bank of India (RBI) had issued guidelines for the licensing and operation of asset reconstruction companies (ARCs), covering aspects such as capital adequacy, governance, risk management, and disclosure requirements, according to the petitioner.
In certain instances, partnerships between ARCs and banks may necessitate approval from both the RBI and the Securities and Exchange Board of India (SEBI), the court added.
Earlier this year, Swamy had approached the high court, seeking directives to the Union Ministry of Finance, RBI, and SEBI to regulate arrangements between banks, non-banking financial institutions, or other financial entities and ARCs.
Swamy aimed to bring attention to the escalating issues in the private banking sector, emphasizing the deterioration of corporate governance and ethical standards within the industry. The plea highlighted concerns about conflicts of interest between banks and ARCs, particularly when questionable transactions between the two entities are allowed to persist without regulatory intervention.
The petition specifically addressed the transfer of a stress asset portfolio valued at Rs. 48,000 crore from Yes Bank to J C Flowers ARC, linking it to another deal in which Yes Bank obtained a stake of up to 19.9 percent in J C Flowers Asset Reconstruction Company, allegedly bypassing laws and regulations.
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