NEW DELHI: The Supreme Court told the Reserve Bank of India (RBI) on Friday it was giving “a last opportunity” to provide information to the public under the Right to Information (RTI) Act on defaulters and audit and inspection reports of banks and other financial institutions. This also includes any information the regulator collects as part of its public duties such as show-cause notices, fines and action-taken reports.
The court, reaffirming a December 2015 ruling asking the central bank to furnish such details under RTI, however didn’t initiate contempt action against the regulator.
“Though we could have taken a serious view of… continuing to violate the directions issued by this court, we give them a last opportunity to withdraw the disclosure policy in so far as it contains exemptions which are contrary to the directions issued by this court,” it said. Following the 2015 ruling, the regulator had put in place a disclosure policy in November 2016 barring the release of information related to inspections and sparking the contempt petitions.
The RBI was duty bound to furnish “all information relating to inspection reports and other material” except advisory notes that were sensitive in nature, the court said on Friday. “Any further violation shall be viewed seriously by this court.”
Under the 2016 disclosure policy, information obtained from or submitted by banks and financial institutions and held by the central bank in a fiduciary capacity couldn’t be given to the public.
The contempt petitions by RTI activist Subhash Chandra Agrawal and others had cited the RBI’s refusal to share information on the 2008 forex derivatives scam and action taken reports against banks and financial entities.
The RBI initially claimed in another case involving Housing and Urban Development Corp. (Hudco) that there were several other laws that barred the sharing of sensitive information such as defaulters’ lists and that the RTI could not override them. It sought a reconsideration of the court’s 2015 ruling. The regulator had handed over a list of defaulters in a sealed cover to the top court headed by then chief justice of India JS Khehar. That case is still pending.
One of the lawyers for the petitioners, Prashant Bhushan, said on Friday that the disclosure policy was contrary to the 2015 court ruling.
The bench of justices L Nageswar Rao and MR Shah said that the 2015 ruling had rejected the RBI’s claim that such information was fiduciary in nature and would adversely affect public confidence in the banking sector and could be shared. The central bank has a statutory duty to uphold the interest of the public at large, depositors, the economy and the banking sector. It should act with transparency and not hide information that might embarrass individual banks, it said, citing the earlier ruling.
The intent of the legislature was to make available to the general public such information which had been obtained by public authorities from private bodies, it noted. The RBI was hence liable to provide information regarding inspection reports and other documents to the general public. It could deny information though to guard national security, sovereignty, national economic interest and relations with foreign states etc.
Matters of national economic interest, disclosure of information about currency or exchange rates, interest rates, taxes, regulation or supervision of banking, insurance and other financial institutions, proposals for expenditure or borrowing and foreign investments could in some cases harm the national economy, particularly if released prematurely, the 2015 ruling had said. However, non-critical economic and financial information such as contracts and departmental budgets should not be withheld under this exemption, it said.