SC warns RBI: Can’t deny info on bank audits under RTIhttps://indianexpress.com/article/business/banking-and-finance/sc-warns-rbi-cant-deny-info-on-bank-audits-under-rti-5697121/

SC warns RBI: Can’t deny info on bank audits under RTI

The policy, it said, was contrary to an earlier court ruling that had ordered disclosure of such information.

SC warns RBI: Can’t deny info on bank audits under RTI
It asked the banking regulator to withdraw the disclosure policy insofar as it contradicted the court’s judgment dated December 16, 2015. (Express Photo by Pradip Das)

The Supreme Court Friday said the Reserve Bank of India had committed contempt of court by coming out with a disclosure policy that allowed departments to withhold certain information related to banks under the Right to Information Act. The policy, it said, was contrary to an earlier court ruling that had ordered disclosure of such information.

Observing that the “Respondents, in our opinion, have committed contempt of this Court by exempting disclosure of material that was directed to be given by this Court”, the bench of Justices L Nageswara Rao and M R Shah, however, stopped short of initiating further proceedings and gave the RBI one last chance to provide the information.

It asked the banking regulator to withdraw the disclosure policy insofar as it contradicted the court’s judgment dated December 16, 2015.

The order came on a clutch of contempt petitions. One of the petitioners had filed an application under the RTI Act on December 18, 2015, seeking information relating to inspection reports of ICICI Bank, Axis Bank, HDFC Bank and State Bank of India since April 1, 2011.

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The petitioner had also sought information relating to the Sahara Group of Companies and Bank of Rajasthan. The RBI had refused to provide the information stating that “the disclosure was not in economic interest of the State, and would adversely affect the competitive position of the third party”.

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In its order, the bench said: “Though we could have taken a serious view of the Respondents continuing to violate the directions issued by this Court, we give them a last opportunity to withdraw the disclosure policy insofar as it contains exemptions which are contrary to the directions issued by this Court. The Respondents are duty-bound to furnish all information relating to inspection reports and other material apart from the material that was exempted in para 77 of the judgment,” the bench said, adding “any further violation shall be viewed seriously by this Court”.

Subsequent to the 2015 judgment, the RBI uploaded a Disclosure Policy on its website on November 30, 2016 “by which”, the petitioners contended, “the Public Information Officers were directed not to disclose virtually all kinds of information”.

The policy exempted from disclosure “information relating to specific supervisory issues emanating from inspection or scrutiny reports received from other supervisory departments”. It also exempted “inspection reports falling within the purview of the ‘department of banking supervision’” besides “any information obtained from/submitted by banks/Financial Institutions and held by the RBI in a fiduciary capacity”.

On April 12, 2019, the RBI uploaded a new disclosure policy replacing the earlier one. But the court upheld the contention of the petitioner’s counsel Pranav Sachdeva that “the new policy which replaces the disclosure policy dated 30.11.2016 directs various departments not to disclose information that was directed to be given by the judgment of this Court on 16.12.2015”. Appearing for the RBI, senior advocate Jaideep Gupta assured that “the disclosure policy shall be deleted from the website” of the bank.

In its December 2015 judgment, the Supreme Court had rejected the RBI’s justification that it had rightly refused to disclose information related to some banks under the RTI Act as it held a fiduciary relationship with the banks. The court had then said “there is no fiduciary relationship between the RBI and the financial institutions”.

The 2015 order “emphasised that RBI has a statutory duty to uphold the interests of the public at large, the depositors and the country’s economy and the banking sector” and that it “should act with transparency and not hide information that might embarrass the individual banks”. “The submission made on behalf of the RBI that the disclosure would hurt the economic interests of the country was found to be totally misconceived,” the court had said.

But keeping in view Section 8(1) of the RTI Act, under which information can be denied in the interest of national security, sovereignty, national economic interest and relations with foreign states, the Supreme Court, in paragraph 77 of the judgment, had said that “not all the information that the Government generates shall be given to the public”.