Reproaching the Reserve Bank of India for trying to “cover up” the “underhand actions” of banks from the public gaze, the Supreme Court on Wednesday ruled that the apex banking regulator is bound in law to give information regarding private and public banks under the Right To Information Act.
“RBI is supposed to uphold public interest and not the interest of individual banks. We have surmised that many financial institutions have resorted to such acts which are neither clean nor transparent. The RBI in association with them has been trying to cover up their acts from public scrutiny,” said a bench of Justices M Y Eqbal and C Nagappan.
Trashing a batch of appeals filed by the RBI against various orders passed by the Central Information Commission and high courts over disclosure of information relating to banks, the court held that “this attitude of the RBI will only attract more suspicion and disbelief in them.”
Underlining that the RBI cannot deny information about banks under the RTI Act, the court reminded it that as a regulatory authority, it should work to make the banks accountable to their actions.
It rejected RBI’s arguments that it withholds information about other banks in “fiduciary relationship” and hence such information will be exempted under the RTI Act.
“RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector,” held the bench. It added that the RBI ought to act with transparency and not hide information that might embarrass banks. “It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by applicants. The baseless and unsubstantiated argument of the RBI that the disclosure would hurt the economic interest of the country is totally misconceived,” stated the court.