RBI Governor Gets Show Cause Notice from CIC for Not Disclosing Defaulters’ List
Moneylife Digital Team 05 November 2018
The Central Information Commission (CIC) has issued a show-cause notice to Dr Urjit Patel, governor of the Reserve Bank of India (RBI) for not honouring a judgement of the Supreme Court on disclosure of wilful defaulters’ list who had not paid loans of Rs50 crore and more. 
 
In the notice, central information commissioner Prof Sridhar Acharyulu had also asked the prime minister’s office (PMO), finance ministry and RBI to make public the letter sent by previous governor Raghuram Rajan on bad loans.
 
In the order, Prof Acharyulu stated, ""The Commission finds no merit in hiding the names of, details and action against willful defaulters of big bad loans worth hundreds of crores of rupees. The RBI shall disclose the bad debt details of defaulters worth more than Rs1,000 crore at the beginning, of Rs500 crore or less at later stage within five days and collect such information from the banks in due course to update their voluntary disclosures from time to time as a practice under Section 4(1)(b) of RTI Act."
 
Prof Acharyulu, irked over the denial of information on wilful defaulters who had unpaid loans of Rs50 crore and more, asked the RBI governor to explain why maximum penalty should not be imposed on him for ‘dishonouring’ a verdict from the apex court, which had upheld a decision taken by then Information Commissioner Shailesh Gandhi, calling for disclosure of names of wilful defaulters. 
 
Prof Acharyulu also referred to a speech by Dr Patel at the Central Vigilance Commission (CVC) where he had talked about CVC guidelines and how it were aimed to greater transparency. “The Commission feels that there is no match between what RBI governor and deputy governor say and their website regarding their RTI policy, and great secrecy of vigilance reports and inspection reports is being maintained with impunity in spite of the Supreme Court confirming the orders of the CIC in the Jayantilal case”, Prof Acharyulu had said. 
 
In normal circumstances, the public information officer (PIO) is held responsible for any lapses and penalised for not obeying orders passed by the CIC. However, in this case, Prof Acharyulu felt that punishing the CPIO of RBI will not serve any purpose as he may have followed instructions from the top authorities. 
 
Thus, he said, “The Commission considers the RBI governor as deemed PIO responsible for non-disclosure and defiance of Supreme Court and CIC orders and directs him to show cause before 16 November 2018 as to why maximum penalty should not be imposed on him for these reasons.” 
 
Earlier this year, the CIC had asked the finance ministry, the ministry of statistics & implementation and RBI to make public, the names of those bank loan defaulters whose unpaid loans amount to Rs50 crore and above.
 
This order is a sequel to the information sought by an RTI (Right to Information) applicant who was refused information by the central public information officer (CPIO) of the ministry of labour & employment. The RTI applicant had sought information on two issues. One was directly related to the labour & welfare ministry comprising information on employment guarantee schemes. The second related to the names of loan defaulters of Rs50 crore and above which the ministry has nothing to do with, but it was the duty of the CPIO to forward the RTI application to the relevant public authorities—in this case, the ministries of finance and of statistics and implementation and the RBI.
 
The CIC also pointed out that “Section 4(1) (c) of the RTI Act mandates to publish all relevant facts while formulating important policies or announcing the decisions which affect the public; section (d) says provide reasons for its administrative or quasi-judicial decisions to affected persons. What is the policy of the finance ministry, the ministry for statistics and program implementation and the RBI in dealing with the wilful defaulters of Rs50 crore and above?’’
 
Earlier in February 2016, the Supreme Court directed RBI to furnish a list of the companies which are in default of loans in excess of Rs500 crore or whose loans have been restructured under corporate debts restructuring (CDR) scheme by banks and financial institutions. (Read: Supreme Court asks RBI to submit list of big defaulters)
 
Even in December 2015, the apex court, in a landmark judgement, has told the RBI that the banking regulator cannot withhold information citing 'fiduciary relations' under the Right to Information (RTI) Act. Hearing a set of transferred cases, a Division Bench of Justice MY Eqbal and Justice C Nagappan said, "From the past we have also come across financial institutions which have tried to defraud the public. These acts are neither in the best interests of the Country nor in the interests of citizens. To our surprise, the RBI as a Watch Dog should have been more dedicated towards disclosing information to the general public under the Right to Information Act. We also understand that the RBI cannot be put in a fix, by making it accountable to every action taken by it. However, in the instant case the RBI is accountable and as such it has to provide information to the information seekers under Section 10(1) of the RTI Act."
 
In most of the transferred cases, Mr Gandhi, former CIC, while directing the RBI to provide information sought by applicants, had rejected the central bank's contention of 'fiduciary relation' for denying information. 
 
Here is the link to the RTI Judgement Series based on orders passed by Mr Gandhi as CIC.
 
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Comments
P M Ravindran
3 years ago
The information commissioner has no right to presume influence on the PIO for denying info. He was duty bound to impose the mandated penalty and let the PIO, if aggrieved by that decision, to approach the courts. It is the most disgusting and frustrating thing about our justice delivery system that it fails the justice seeker at every step, making a mockery of rule of law. The courts are no less guilty of this crime.
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