SC for Justice Roa-led bench to hear plea by banks against disclosure under RTI

Banks claim disclosure violate right to privacy

Several public sector and private banks including SBI and HDFC Bank on Tuesday suffered a setback as the Supreme Court's bench led by Justice S Abdul Nazeer refused to entertain their plea for exemption from disclosing details related to their customers, trade secrets, risk ratings, etc under the Right to Information Act.

The court, however, said that the fresh petitions will be heard by the original bench presided over by L Nageswara Rao.

Justice Rao-led bench had earlier dismissed a joint plea by the central government and 10 banks seeking a recall of the judgment in Jayantilal N Mistry (2015) that mandated RBI to disclose inspection reports of banks as well as details of willful defaulters on the grounds that the central bank had no fiduciary relationship with the banks.

On Tuesday, Justice Nazeer-led bench said, "We don’t think it proper to hear the case. We are of the view that it is appropriate to list the matter before the original bench of J Rao.”

Justice Rao’s bench had in April reiterated its 2015 judgment making it necessary for the RBI to disclose financial information related to private and public banks under the RTI Act.

However, around a dozen banks filed separate petition saying that they, being privy to sensitive information like personal details of its account holders, prospective loans and other financial transactions, are required to keep such details confidential and maintain privacy as directed by the top court in the Justice KS Puttasamy vs UoI (Aadhaar judgment), which recognised the fact that right to privacy is a sacrosanct facet of fundamental rights.

Besides SBI and PNB, four private banks – HDFC Bank, Axis Bank, ICICI Bank and Yes Bank – in their joint petition said that RBI in its role as banker to the government and banking regulator receives and holds a lot of sensitive information, the disclosure of which may not be in the interest of the nation or serve public interest.

Senior advocate Mukul Rohtagi, appearing for the HDFC Bank, contended that the bank was not a party when the earlier order mandating disclosure was passed.

“Today’s petitions are different and there is no need for Justice Rao's bench to hear them," he said.

Rohtagi along with senior counsel K V Vishwanathan and Solicitor General Tushar Mehta (appearing for SBI), contended that the matter should be heard by a larger bench as privacy of customers is of utmost importance to a bank, who have “guarded commercial secrets.”

Rohtagi said that the RTI Act does not apply to private entities like them.

“No bank customer wants his safeguards/parameters should be disclosed to anyone. These inspections prepared by RBI are treated as highly confidential. Banking business is a business of faith and trust.. it has millions of accounts, entire banking fabric will be finished if all the inspection reports are made public. Besides, private banks’ shares are traded and they are not created by any statute, thus not covered under the RTI Act,” he contended.

Advocate Bhushan, for his part, read out a Risk assessment report of Union Bank of India.

"These inspection reports just give details of working of the bank including supervision of its lending policies so as to check defaulters like Vijaya Mallya ad Mehul Chokshi. The whole document doesn’t give names of any customer. There is nothing confidential in this report," he said.