Supreme Court refuses to entertain banks’ plea for RTI exemption

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August 18, 2021 3:00 AM

A Bench led by Justice Nazeer said that “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”.

He also said that the judgment was delivered only after all the banks through Indian Banking Association were heard.He also said that the judgment was delivered only after all the banks through Indian Banking Association were heard.

In a setback to various public sector and private banks, including SBI and HDFC Bank, a Supreme Court bench led by Justice SA Nazeer on Tuesday refused to entertain their petitions seeking exemption from disclosing any information related to their customers, trade secrets, risk ratings or any unpublished price sensitive information from the Right to Information (RTI) Act.

It said that these fresh petitions will be heard by the original Bench led by L Nageswara Rao, which 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 wilful defaulters on the grounds that the central bank had no fiduciary relationship with the banks.

A Bench led by Justice Nazeer said that “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 revived its 2015 judgment making it necessary for the RBI to disclose financial information related to private and public banks under the RTI Act.

In another attempt to wriggle out of the transparency law, around a dozen banks have filed separate petitions, 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 info confidential and maintain privacy as directed by the SC in the Justice KS Puttasamy vs UoI (Aadhaar judgment), which recognises 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 counsel Mukul Rohtagi, appearing for the HDFC Bank, argued 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 while opposing the stand of counsel Prashant Bhushan, appearing for the RTI activist, that the original Bench should only hear these petitions.

Rohtagi along with senior counsel KV 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”.

Terming disclosure of inspection reports as invasion of privacy of banks, their customers and employees, Rohtagi said that the RTI Act does not apply to private entities like them as they are not public authorities under the Act and therefore, information pertaining to such banks and their customers cannot be sought under the RTI Act, let alone confidential/sensitive information of such banks/FIs. “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 argued.

Reading out a Risk assessment report of Union Bank of India, Bhushan told the Bench that “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 also said that the judgment was delivered only after all the banks through Indian Banking Association were heard.

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