Disclose confidential inspection reports of banks: CIC to RBI

The Central Information Commission has directed RBI to make public Annual Financial Inspection (AFI) reports of banks and also the fines imposed on them based on this exercise.

Information Commissioner Shailesh Gandhi gave the direction while overruling the objections raised by Reserve Bank of India that these reports are confidential.

RBI had contended that making the reports public might adversly affect the economic interests of the State, harm banks' competitive position and also that the information is held in fiduciary capacity.

"The disclosure may impact the banking sector on the whole. This could trigger a ripple effect on the deposits of not only one bank to which the information pertains but others as well due to contagion effect.

"This has serious implication on financial stability which rests on public confidence in banks and financial institution, besides harming their competitiveness," the RBI submitted before the CIC.

The RBI also cited a previous Full Bench order of the transparency panel in which it said that the Bank was the best body to decided whether disclosure would affect economic interests of the State.

This argument was also rejected by the Commission which said that according to the RTI Act it is the transparency panel which could decide on disclosure issues.

Gandhi however agreed with RBI that disclosure might compromise the safety of whistleblowers, informers and source of information and directed to delete such details from the inspection report before making it public.

Information Commissioner Shailesh Gandhi in his detailed order said it follows from RBI argument that if it made mistakes, or there was corruption, citizens would suffer.

"This appears to go against the basic tenets of democracy and transparency...Any constraint on the fundamental rights of citizens has to be done with great care even by Parliament," he said.

The Commissioner said exemptions under Section eight and nine of the RTI Act are the constraints put by Parliament and adjudicating bodies have to carefully consider whether the exemptions apply before denying any information under the RTI framework.

While hearing the plea of Subash Agrawal who sought the information, Gandhi said it is pertinent to mention that citizens have a right to know about the functioning and working of banking companies including any regulatory lapses.

"If there are irregularities in the functioning of financial institutions and banking companies as sought in queries...citizens certainly have a right to know about the same. A larger public interest would be served by disclosing this information- under Section 8(2) of the RTI Act," he said while dismissing the argument that information is held in fiduciary capacity with the RBI.