The RBI had refused to provide information to the petitioner, claiming “fiduciary relationship” between itself and the banks
in question. Such information, the regulator had then said, was exempted from being revealed under Section 8(1) (d) and (e) of the RTI Act. Section 8 allows the government to withhold from public some information in order to “guard national security, sovereignty, national economic interest, and relations with foreign states”.
The information to the petitioners was denied by the RBI despite orders from the Central Information Commissioner (CIC) to do so.
However, in January 2015, a two-judge bench of the then Justices M Y Eqbal and C Nagappan, while rejecting this argument by the RBI, had held that the banking sector regulator was supposed to “uphold public interest and not the interest of banks”. The RBI, the Bench had said, was thus “clearly not in any fiduciary relationship with any bank”. “The 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,” the top court had then said. This behaviour of the banking sector regulator of denying information under RTI would “only attract more suspicion and disbelief in them”, the two-judge Bench had said.
One of the petitioners who had sought the information from the RBI under RTI had claimed that there was a loss of nearly ~32,000 crore to the nation due to foreign derivative contract cases. The petitioner had sought a bank-wise breakup of the mark-to-market losses due to these contracts. Another petitioner, who had approached the top court after being denied information by the RBI, had sought to know the details of show-cause notice and fines imposed on various banks.
On June 30, 2016, the RBI uploaded a disclosure policy under which it claimed that the “Public Information Officers (PIO) were directed not to disclose virtually all kinds of information”. One of the exemptions under the new policy was related to the department of banking regulation and said that “information relating to specific supervisory issues emanating from inspection or scrutiny reports received from other supervisory departments” were exempted from disclosure.
The RBI had again come out with a new disclosure policy on April 12, 2019. The new policy mentions that information available to a person in his fiduciary relationship can be withheld by the RBI. The RBI said that “each application received under the RTI Act would be examined in light of the provisions of the Act and any decision with respect to non-disclosure by the Bank will be supported by citing the relevant exemption provisions of the RTI Act”.
People familiar with the working of the banking sector regulator, however, said that since the SC order is now in effect and is the stronger of the two, it will be followed.
“The respondents (RBI) are duty-bound to furnish all information relating to inspection reports,” the Friday judgment says.
The information sought is from Annual Financial Inspection reports, which the RBI prepares as supervisor of banks. These reports focus on statutorily mandated areas of solvency, liquidity and operational health of the bank. It covers areas like capital adequacy, asset quality, management, earning, liquidity and system and control.