Indian Court Orders Disclosure by Reserve Bank

17 December 2015

The Indian Supreme Court has ruled that the Reserve Bank of India (RBI) must disclose inspection reports on banks, regulatory actions and lists of loan defaulters, among other things, even if it embarrasses individual banks.

The court says RBI cannot deny information on defaulters and irregularities on grounds of “economic interest, commercial confidence, and fiduciary relationship.” (Reserve Bank of India vs Jayantilal N. Mistry)

“RBI has statutory duty to uphold public interest and not the interest of individual banks,” the court observed while dismissing the central bank’s plea for exemption under the Right to Information Act, “the court said.

The decision elaborates:

RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximise the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector.

The court upheld an order by the Central Information Commission. Further legal activity is possible.

See articles in The Business Standard, and DNA India. The case is analyzed in Governance Now by Venkatesh Nayak, programme coordinator, Access to Information Programme, Commonwealth Human Rights Initiative.

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