RBI cannot withhold info on defaulter, says apex court

Holding that the Reserve Bank of India (RBI) cannot withhold information on defaulters under the RTI Act, the Supreme Court has asked the banking regulator to take strict action against financial institutions which were trying to cover up their acts.

A bench of Justice M Y Eqbal and Justice C Nagappan said that the RBI cannot take pretext of confidence or trust with financial institutions and is accountable to provide information sought by general public.

“RBI and the banks have sidestepped the general public’s demand to give the requisite information on the pretext of 'Fiduciary relationship' and 'Economic Interest'. This attitude of the RBI will only attract more suspicion and disbelief in them. RBI as a regulatory authority should work to make the banks accountable to their actions,” the bench said.

The apex court rejected the contention that disclosure of information might affect economic interest of the country, by terming it as “misconceived”.

“It includes in its ambit a wide range of economic transactions or economic activities necessary and beneficial to attain the goals of a nation, which definitely includes as an objective economic empowerment of its citizens. It has been recognised and understood without any doubt now that one of the tool to attain this goal is to make information available to people,” the court held.

Noting that several banks resorted to non-transparent stances and tried to defraud public, the court pointed out, “The RTI Act under Section 2(f) clearly provides that the inspection reports, documents etc., fall under the purview of ‘Information’ which is obtained by the public authority (RBI) from a private body.”

The court passed its judgment on a clutch of pleas transferred from various High Courts against the Central Information Commission (CIC) direction to furnish the information sought by applicants under the transparency law.

The court asked the RBI to desist from trying to cover up the acts of financial institutions from public scrutiny. “It is the responsibility of the RBI to take rigid action against those banks which have been practicing disreputable business practices,” the court said.