Bank of Baroda vs IOCL

The Calcutta High Court has directed the Reserve Bank of India (RBI) to contemplate taking suitable steps against the Bank of Baroda (BoB) such as cancelling its license for failing to honour a bank guarantee furnished by a third party to Indian Oil Corporation Ltd (IOCL).

The two-judge division bench of Justice Sanjib Banerjee and Justice Kausik Chanda in the order on February 10 instructed the RBI to “consider the conduct of the appellants” and take into account “appropriate steps” that can be considered against the bank “including revoking its license or the authority to carry on banking business, if necessary.”

The court was hearing a case filed by IOCL against the BoB as the bank did not release the payment with regards to a bank guarantee worth Rs 6.97 crore provided to it (IOCL) by Simplex Projects Ltd.