Janata Party president Subramanian Swamy had contended that P Chidambaram as finance minister had a role in fixation of prices of the licenses and in the dilution of shares by the telecom firms to two foreign companies
New Delhi: The Supreme Court on Thursday left it to the trial court to decide on the demand for investigation of the alleged role of Union home minister P Chidambaram into the second generation (2G) spectrum allocation scam but refused to give direction to Central Bureau of Investigation (CBI) on the issue, reports PTI.
Disposing of the petitions filed by Janata Party president Subramanian Swamy seeking a direction to the CBI to probe the alleged role of Mr Chidambaram, a bench comprising justices GS Singhvi and AK Ganguly said that its order should no way influence the proceedings before the trial court.
The apex court said that the trial court should decide the matter within two weeks.
Special CBI judge OP Saini, who is hearing a separate petition of Mr Swamy to prosecute Mr Chidambaram, has already reserved his order for 4th February.
Mr Swamy had contended that Mr Chidambaram as finance minister had a role in fixation of prices of the licenses and in the dilution of shares by the telecom firms to two foreign companies.
The apex court cancelled licences of 11 telcos, including 21 of Videocon, 22 Uninor, 9 Idea, 3 Tata Tele, 13 Swan, 21 Loop and asked TRAI to come up with guidelines to allocate newer licences
The Supreme Court on Thursday cancelled all licences given to 11 telecom companies issued after January 2008. The apex court has cancelled 122 licences, including 21 of Videocon, 22 of Uninor, 9 of Idea, 3 of Tata Tele, 13 of Swan, 21 of Loop, 6 of S-Tel and 2 of Allianz.
The ruling has come as a major blow to the Congress-led United Progressive Alliance (UPA) government. The Supreme Court observed that 85 out of the 122 licences granted by the UPA government on or after 8 January 2008 were outside the eligibility criteria for allocation of the 2G spectrum. "The 122 licences for 2G spectrum were granted in arbitrary and unconstitutional manner," the Court said.
A two-judge bench comprising justices GS Singhvi and AK Ganguly allowed the impugned licenses to run for four months after which the cancellation order will become operative.The apex court asked the Telecom Regulatory Authority of India (TRAI) to come up with fresh recommendation on granting of 2G licences.
The SC imposed heavy costs of Rs5 crore on Etisalat DB Telecom Pvt Ltd (Swan Telecom Ltd), Unitech Wireless Group and Tata Teleservices Ltd, who were benefited by a "wholly arbitrary and unconstitutional" action of award of licenses to them and for off-loading their stakes for many thousand crores in the name of fresh infusion of equity or transfer of equity.
It ordered Loop Telecom Pvt Ltd, S-Tel, Allianz Infratech and Sistema Shyam Tele Services Ltd, who were also beneficiary of the decision, to pay a cost of Rs50 lakhs each.
Meanwhile, the Finance Ministry said it is working out the financial implication of the Supreme Court judgement to cancel 122 telecom licences on the banking sector. "We have to see the implication. Officers are working on the impact of judgement on the banks...we will soon have a clear picture," a senior finance ministry official told PTI.
Several lenders including the State Bank of India, ICICI Bank, Punjab National Bank and IDBI Bank have extended credit to the telecom companies whose licences have been cancelled. Country's largest lender SBI said the bank has fund based exposure of Rs1,100 crore in telecom companies affected by the apex court order.
In a release, Telenor, the holding company of Uninor, whose 22 licences are cancelled by the apex court, said, "Telenor has yet to review the ruling and will be able to comment further once we had a chance to review it".
The apex court also referred the matter on probing Home Minister P Chidambaram's role in the 2G scam to the Central Bureau of Investigation (CBI) Special Court. On Saturday Justice OP Saini of the Special Court is expected to deliver the verdict on whether Mr Chidambaram should be made a co-accused in the 2G scam.
In another important judgement, the Supreme Court refused to sanction a Special Investigation Team (SIT) to over-see the CBI inquiry in the 2G spectrum allocation scam. Instead, the apex court said, the Central Vigilance Commission (CVC) should monitor the investigation and the CBI should submit its status reports in sealed envelopes to the Commission.
Meanwhile, Central Vigilance Commissioner Pradeep Kumar has expressed satisfaction over the progress in 2G issue and said the Commission will give a prompt response after studying the Supreme Court judgement. "We will study that judgement. We will respect that judgement and CVC as you know has referred the matter to the CBI and we are glad that matter is progressing," Kumar told reporters in New Delhi.
The RBI has allowed other private sector banks to handle government business but a few more steps are required to ensure a level playing field for all players for healthy growth of banking in India
The Reserve Bank of India (RBI) has just issued a notification whereby private sector banks are now permitted to handle central and state government business on complying with certain formalities. This will be a step forward in removing the discrimination existing at present between the private and the public sector (nationalised) banks (PSBs).
In fact, three private sector banks, ICICI Bank, HDFC Bank and Axis Bank were treated as more equal than others and allowed to handle government business since long due to the clout they enjoyed with the powers that be and repeated requests from other private banks to treat them at par were not heeded to so far.
Now that RBI has loosened its strings by allowing all the private banks to handle government business, this will not only help these banks to improve their business, but more importantly, it will be of great help to the customers. Customers of these banks and the public at large will be able to do transactions with the nearest branch of any bank they are comfortable with and those who are able to offer better customer service, irrespective of the ownership of the bank concerned. It is not uncommon to see a huge crowd in some of the PSBs like State Bank of India (SBI) during the first week of every month, where customers have to wait for a hours together to get their pension while at the same time the private banks’ branches wore a deserted look for no fault of theirs.
However, this notification issued by RBI, though not very clear, hopefully will include payment of pension to employees of the central and state governments and those of the defence forces, who now get their pensions only through the PSBs. It would be of great help to these pensioners, if both the governments start disbursing of pensions through any public or private bank according to the choice of the pensioner, thereby helping the retired employees, especially the senior citizens in their old age.
There are still a few more areas of discrimination against the private banks and the RBI should take steps to remove these anomalies and provide a level playing field for all the banks in the interest of encouraging competition and improved customer service.
At present, the Government of India (GoI) provides interest subvention of 2% and 3% on short term crop loans only to the PSBs, co-operative banks and regional rural banks, in respect of their lending to agriculture on certain terms and conditions, to encourage them to lend to the agriculturists at a subsidized rate of 7%. While this will help PSBs to attract farmers into their fold for increasing their lending to the priority sector, the same benefit is not available to private banks, which also have to meet priority sector lending targets or face penalty prescribed by the RBI.
If the subsidy is to encourage lending at a lower rate to the poor people, there is no rhyme or reason, why private banks are excluded from this scheme and the RBI is a silent spectator to this discrimination practiced by the central government.
Again, the central government has been periodically issuing instructions to public sector units or companies (PSUs) to bank and place their surplus funds with PSBs only, even when the PSUs may get better terms or interest from the private banks. This is not only against the interest of the PSUs but also in conflict with the good corporate governance expected to be practiced by all the companies in general and the PSUs in particular. RBI as the regulator of banking sector has the responsibility to ensure that all banks are treated fairly in the interest of orderly development of banking in India.
Let us hope that this will be beginning of an era of equality and fair play for all the banks and the steps initiated by RBI should be a forerunner for licenses to be issued for setting up new banks in the private sector.
(The author is a financial consultant and writes for Moneylife under the pen-name ‘Gurpur’)