"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 transparency law.
The Supreme Court has slamming the Reserve Bank of India (RBI) for denying informations about the banks and financial institutions for their action against the loan defaulters including industrialists under the RTI Act.
"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 transparency law.
"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," a bench headed by M Y Eqbal and upheld the Central Information Commission's (CIC) order to SBI and other banks for disclosure of information under the RTI Act.
"Thus, the RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty-bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein." The bench made the remark while dismissing a batch of pleas filed by RBI and other private and nationalised banks against the CIC order.
It said many financial institutions have resorted to such acts which are neither clean nor transparent adding, "The RBI in association with them has been trying to cover up their acts from public scrutiny. It is the responsibility of the RBI to take rigid action against those Banks which have been practicing disreputable business practices."
The bench accepted the submission made by noted advocate Prashant Bhushan said that the right to information regarding the functioning of public institutions is a fundamental right this court has held in many cases for the functioning of a healthy and well-informed democracy is transparency.
He appeared for one of the petitioners, PP Kapoor, who had asked about the details of the loans taken by the industrialists that have not been repaid, and he had asked about the names of the top defaulters who have not repaid their loans to public sector banks.
The RBI resisted the disclosure of the information claiming exemption under Section 8(1) (a) and 8(1)(e) of the RTI Act on the ground that disclosure would affect the economic interest of the country.
In November 2011, the CIC had found these arguments made by RBI to be totally misconceived in facts and in law, and held that the disclosure would be in public interest.
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