[ By Bobby Anthony ]The Calcutta High Court has directed the Reserve Bank of India (RBI ) to take appropriate steps against Bank of Baroda (BoB), including revoking its banking license, if necessary.The court directed the RBI to consider such action after the BoB failed to honor a bank guarantee given by a third party to the Indian Oil Corporation Ltd (IOCL).A division bench comprising...
The Calcutta High Court has directed the Reserve Bank of India (RBI ) to take appropriate steps against Bank of Baroda (BoB), including revoking its banking license, if necessary.
The court directed the RBI to consider such action after the BoB failed to honor a bank guarantee given by a third party to the Indian Oil Corporation Ltd (IOCL).
A division bench comprising Justice Sanjib Banerjee and Justice Kaushik Chanda took up a cross-objection by respondent IOCL in a matter relating to an appeal by BoB against IOCL.
The objection was taken up immediately after dismissing an appeal by BoB for default.
The oil company told the court that it had entered into an agreement with Simplex Projects Limited in 2017 for undertaking certain work at the Bongaigaon facility of IOCL in Assam.
In terms of such agreement, IOCL was obliged to make a mobilization advance against a bank guarantee, while Simplex was also required to furnish a bank guarantee on account of security deposit, the court noted.