The Bombay High Court today said it can only look into the decision-making process used by the Reserve Bank of India (RBI) to place the United Western Bank under moratorium from September 2, 2006. The court made it clear that it will not sit in judgement over the decision of the RBI, a regulatory body which has expertise in the financial sector.The court also asked the depositors of the bank, who have challenged the moratorium, to explain the legal basis for the right of depositors to seek information from RBI. The next hearing has been scheduled for October 5, 2006.The process of amalgamation of UWB with IDBI Bank would not have a bearing on the hearing in this petition. The appeal against the moratorium will remain alive, the court said.The petitioners including a lawyer Varshra Deshpande, have argued that the moratorium order should be set aside as there was no transparency in the functioning of the RBI nor had the central bank informed UWB's account holders about the financial health of the bank. UWB, which has been made party in the case, said its affidavit (submission) has been made pending the permission from RBI to incur necessary expenditure and obtaining legal advice. After the moratorium, the bank is prohibited from spending over Rs 10,000 in any suit or decree and it had not received response from RBI till September 26 to its letter dated September 22, 2006.
