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RBI circular on disclosure of inspection reports under RTI risks confidentiality: Banks to SC

RBI circular on disclosure of inspection reports under RTI risks confidentiality: Banks to SC

Banks have filed a plea in the Supreme Court against the earlier judgement upholding the Reserve Bank rule allowing the disclosure of bank inspection reports including NPAs under the RTI

Senior advocate Mukul Rohatgi, appearing for banks' consortium, says the RBI circulars make the banking inspection reports confidential. Senior advocate Mukul Rohatgi, appearing for banks' consortium, says the RBI circulars make the banking inspection reports confidential.

In a petition against the Reserve Bank of India (RBI) circular that allowed the disclosure of banks' inspection reports under the RTI, the lenders have told the Supreme Court that it's a risk to the confidentiality and violates the privacy of clients.

The matter will now be heard by a bench of Justice LN Rao and Justice SK Kaul. This is the same bench that earlier rejected the recall application filed by banks against the Jayantilal Mehta case, where the court had initially allowed the disclosure under RTI.

Banks have filed a plea in the Supreme Court against the earlier judgement upholding the Reserve Bank rule allowing the disclosure of bank inspection reports including NPAs (non-performing assets) under the RTI.

Senior advocate Mukul Rohatgi, appearing for banks' consortium, sought the issue to be sent to a larger bench. "Privacy of banking customers is at risk. No customer wants their accounts, transactions, etc, to be revealed to busybodies. We are private banks. We are not open to the RTI. But the RBI circular has opened us to the RTI."

He said the RBI circulars make the banking inspection reports confidential. "That's the mandate of the RBI. Even bank directors can't take the reports home."

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After the SC judgment, the RBI is acting as a "post office", he argued. "The RBI is giving out the confidential report to the RTI activists. Without even asking the bank, they are giving out the report," he said.

Rohatgi said personal and confidential information can't be disclosed. "How is this in the public interest to know the inner workings of a bank? These are several questions, which have to be considered," he asked.

Rohatgi also said the Jayantilal judgment is of two judges, and that it should go to at least a five-judge bench. "It impacts the right to privacy and the right to freely conduct business. Earlier judgments on privacy have been ignored in the Jayantilal judgment. It has to be heard by a five-judge bench."

Justice Abdul Nazeer told Rohtagi that he had already argued these issues before the SC bench, which heard the application to recall the Jayantilal judgment. Rohatgi argued that he was challenging the RBI order that allowed disclosure. On this, J Nazeer said there's a judgment in the recall application and the court had rejected the banks' application on merit.

Solicitor General Tushar Mehta said the court did not reject the plea on merit. "The court said the recall application is not maintainable. The petitioners can raise an argument on merit."

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Published on: Aug 17, 2021, 2:46 PM IST
Posted by: Manoj Sharma, Aug 17, 2021, 2:38 PM IST