The CIC said that since significant amount of public funds are kept in banks and therefore, the public has the right to know how these banks are functioning
In another victory for RTI activists, the Central Information Commission has directed the Reserve Bank of India (RBI) to disclose names of banks which have been penalised or served show-cause notices for violation of laws. The central bank has tried to stonewall such information in the name of protecting fiduciary and commercial interests earlier too; but the CIC has pulled up the apex bank once again.
While hearing an appeal from Subhash Chandra Agrawal, Shailesh Gandhi at CIC ruled that citizens have the right to know what the banks are doing and where they have kept their money. Drawing from its earlier ruling regarding disclosing information about defaulting cooperative banks (read CIC to RBI: Reveal inspection reports of cooperative banks), the CIC said, “The PIO is directed to provide the complete information to the appellant before 15 December 2011 after severing details of customer-related information and particulars of informers/ whistle blowers/ source of information.”
The PIO had earlier refused to divulge details of banks served show-cause notice by the RBI, saying that it will “prejudicially affect the economic interests of the state and harm the bank’s competitive position. The SCNs/findings/reports/associated correspondences/orders are therefore exempt from disclosure.” However, Mr Agrawal went for appeals, which upheld the CPIO’s denial. Dissatisfied, Mr Agrawal approached the CIC. Mr Gandhi dismissed the apex bank’s reasoning that the information would harm the nation’s economic or any other interests.
Criticising RBI’s logic, Mr Gandhi said, “This appears to go against the basic tenets of democracy and transparency. The information sought pertains to imposition of fines by RBI on certain banks for violation of rules including documents, correspondence, file notings, etc, list of banks which were issued show-cause notices before imposition of fine along with the type of default, and list of those banks on which fine was ultimately not imposed along with details. This bench is unable to understand how disclosing this information would affect the economic interests of the Indian nation. Financial stability of a nation cannot lie solely on public confidence in banks/financial institutions, and certainly not where banks/financial institutions holding public funds are involved in irregularities. The submissions of the respondent appear to suggest that the economic state of this nation is extremely fragile and therefore, the information sought should not be disclosed.”
The CIC said that since significant amount of public funds are kept in banks and therefore, the public has the right to know how these banks are functioning. “I believe it will only help to improve the fundamental strength of the economic foundations of the country and safeguard against sudden disruptions,” observed Mr Gandhi.
Analysing a high court precedent which had upheld the RTI against other interests, Mr Gandhi also pointed out the irregularities present in Banking Regulation Act, 1949. He said, “Section 35 appears to impose restrictions on access to information held by or under the control of RBI in as much as the inspection reports shall be provided only to the banking company, or can be published only by the central government after notifying the banking company. This is prima facie inconsistent with the RTI Act, which mandates disclosure of information unless exempted under Sections 8 and 9 of the RTI Act. Therefore, in accordance with Section 22 of the RTI Act, the provisions of the RTI Act shall override the provisions.”
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