List of defaulters will be disclosed?: One last opportunity to RBI, Supreme Court

List of defaulters will be disclosed?: One last opportunity to RBI, Supreme Court

Shruti Mahajan

The Supreme Court today directed the Reserve Bank of India (RBI) to withdraw its “Disclosure Policy” that made certain information exempt from disclosure under the Right to Information (RTI) Act.

While doing so, the Court said that the RBI will have to divulge the information of banks and financial institutions that was sought by the petitioners.

The Court said that even though it could have taken RBI’s violation of its 2015 order seriously, it would give one last opportunity to the banking regulator. The Court said,

“Though we could have taken a serious view of the Respondents continuing to violate the directions issued by this Court, we give them a last opportunity to withdraw the disclosure policy insofar as it contains exemptions which are contrary to the directions issued by this Court. The Respondents are dutybound to furnish all information relating to inspection reports and other material apart from the material that was exempted in para 77 of the judgment. Any further violation shall be viewed seriously by this Court.” 

The judgment rendered by a Bench of Justices L Nageswara Rao and MR Shah states that any future violation of the Court’s order will be treated as contempt.

The decision comes in a batch of contempt petitions filed against the banking regulator for not disclosing information under the RTI in relation to certain banks.

The RBI had not furnished information regarding a list of banks that had violated certain banking rules and norms under the RTI Act. The petitioner had sought a list of such banks, the defaults committed by them, and all related documents from the RBI.

The RBI had issued a “Disclosure Policy” under which certain information was claimed to be exempted from being disclosed under the RTI Act. This policy was brought out despite the Supreme Court’s judgment in relation to such disclosure. The petitioner had claimed that the information sought to be withheld by the RBI was the specified kind of information for which the Court had directed disclosure under RTI.

The grounds taken by the RBI for withholding this information was the nation’s economic interest, as well as the fiduciary relationship of the RBI with the banks.

The petitioner had contended that this rationale for non-disclosure of information was in contempt of the Supreme Court’s verdict of 2015 wherein it had held that the RBI ought not hide information that might embarrass banks. The Court had further held that information regarding defaulters cannot be exempted from being disclosed under the garb of confidence and trust between the RBI and defaulters. Moreover, it was held that the general public has the right to get information on the same.

Read the Judgment:

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