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CIC to RBI: Reveal inspection reports of cooperative banks

‘The idea that citizens are not mature enough is repugnant to democracy’ says Central Information Commissioner Shailesh Gandhi, pulls up apex bank

Confusion has always existed whether cooperative banks come under the purview of the Right to Information (RTI) Act, and attempts at accessing information regarding them have met with a dead end. But a recent Central Information Commission (CIC) ruling has opened up a new path.

The CIC, hearing an appeal against the RBI’s (Reserve Bank of India) refusal to disclose information regarding inspection of cooperative banks decided that such information cannot be termed as ‘fiduciary’ and must be made available to the public. Central Information Commissioner, Shailesh Gandhi, also criticised his own commission for granting RBI a blanket exemption from revealing information.The ruling said, “RBI was unwilling to share information which might bring out the ‘weaknesses in the financial institutions, systems and management of the inspected entities’. It appears that the RBI argued that citizens were not mature enough to understand the implications of weaknesses, and RBI was the best judge to decide what citizens should know.” Mr Gandhi directed RBI to provide all the information sought within 30th November.

The appellant, Jayantilal S Mistry, about a year back, had sought the audit report and details of investigation submitted to the registrar on Makarpura Industrial Estate Co-Operative Bank in Gujarat; and also details of cooperative banks which have gone into liquidation, RBI’s action against them and pertaining processes. The CPIO (Chief Public Information Officer) and the appellate authorities refused, claiming exemptions under the RTI Act, saying that the information was held in a fiduciary capacity and the disclosure will lead to ‘erosion of public confidence.’

The CIC rubbished such observations, and citing various precedents established that information provided in discharge of a statutory requirement cannot be termed as ‘fiduciary.’ Mr Gandhi said, “This Bench is unable to understand how disclosing the investigation and audit reports would in any miniscule way affect the economic interests of the Indian Nation.”

He said that the RBI is a regulatory authority which is responsible for inter-alia monitoring subordinate banks and institutions, where significant amounts of public funds are kept. “Merely because disclosure of such information may adversely affect public confidence in defaulting institutions, cannot be a reason for denial of information under the RTI Act,” he concluded. He also rebuked the RBI saying that it has not been proactive in disclosure of information.

A 2006 full Bench hearing was cited as a precedent by the RBI and the appellate authorities to justify the exemption. Pointing out several loopholes in that ruling, Mr Gandhi said, “The Full Bench left it to RBI to determine whether disclosure of the said information would attract Section 8(1) (a) of the RTI Act. If the position of the Full Bench is to be accepted, it would lead to a situation where the RBI would have the final say in whether information should be provided to a citizen or not. Extending this logic, all public authorities could be the best judge of what information could be disclosed. In such an event the Information Commission would have no role to play. Parliament evidently expected that the Information Commission would independently decide whether the exemptions are applicable.”

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COMMENTS

v n kulkarni

5 years ago

WELL,THE RBI WAS RIGHT TO SOME EXTENT.HOWEVER THERE IS TENDENCY TO MISUSE SUCH INFORMATION TO SETTLE THE SCORES OF RIVALS IN COOP FIELD.THE PURPOSE IS NOBLE,BUT SUCH DISCLOSURSURES,IF MADE PUBLIC WILL SHAKE THE CONFIDENCE OF GENERAL PUBLIC AND THERE MAY BE RUN ON THESE BANKS.WITH DUE PRECAUTIONS SUCH DISCLOSURES BE ALLOWED.

Nagesh Kini FCA

5 years ago

With gross malpractices and growing NPAs co-op sector banks are going down under. They are abused by large politicos. Since large public deposits are involved and their operations spread far and wide and because of their inadequate audit and inspection mechanisms both the MOF Dept. of Banking and RBI ought to take it out of the hold of the State Dept. of Co-op. They are grossly ill equipped or forced to act mala fide.

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