[dropcap]T[/dropcap]he Supreme Court has directed the Reserve Bank of India (RBI) to withdraw its non-disclosure policy and disclose its annual inspection report on banks or face contempt of court proceedings.
The decision comes in the wake of a batch of contempt petitions filed against the central bank for non-disclosure of vital information under the Right to Information Act, 2005 (the RTI Act). The petitioners had contended that the Supreme Court in 2015 had not only held that the RBI could not hide information that might embarrass banks but also that the information regarding defaulters could not be exempted from disclosure under the garb of confidence and trust between the RBI and defaulters.
The RBI is duty bound to reveal information related to willful offenders. “We are giving them the last opportunity to withdraw the disclosure policy,” a two-judge bench of the Supreme Court comprising Justices L Nageswara Rao and M R Shah said yesterday in response to the contempt petitions.
RBI bound to disclose information
In 2016, the RBI laid out a “disclosure policy’ that made certain information exempt from disclosure under the RTI Act – mainly information on big loan defaulters. It justified this policy in the name of protecting the nation’s economic interest as well as its fiduciary relationship with banks.
While rejecting the RBI’s grounds for denial of information and directing the bank to withdraw its disclosure policy, the court relied on its own judgement in Reserve Bank of India v Jayantilal N Mistry [2016(3) SCC 525], where while holding that the central bank had a statutory duty to uphold the interests of the public-at-large, depositors, the country’s economy and the banking sector, it had directed the disclosure of information sought for under the RTI Act relating specifically to individual banks regulated and supervised by the RBI.
“The RBI should act with transparency and not hide information that might embarrass the individual banks … the RBI is duty bound to comply with the provision of the RTI Act and disclose the information, ” the court said while reacting sharply to the central bank’s refusal to withdraw its disclosure policy.
“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”.
“Any further violation shall be viewed seriously by this court,” the court said yesterday.