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Give audit report: central information commissioner to RBI

The central bank had earlier refused to give the info saying it would ‘harm the interest’ of the bank & the banking system

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Why did your cooperative bank shut down, what action has been taken against those responsible for the collapse, how funds were going to be recovered, you can now get answers to all these queries through the Right to Information Act, 2005.

In an order dated November 2, 2011, Central Information Commissioner (CIC) Shailesh Gandhi has asked the Reserve Bank of India (RBI) to part with information related to an investigation done on a cooperative bank, provide its audit report and also give details on all banks that have gone under liquidation, including what action has been taken against the directors for recovery of funds.

The order came after a Gujarat resident, Jayantilal Mistry, filed an application seeking the investigation and audit reports of Makarpura Industrial Estate Cooperative Bank Ltd.

However, the RBI refused to oblige mainly on two grounds — first, that the information was in fiduciary capacity and, second, that disclosure of such information may harm the interest of the bank and the banking system. The RBI cited two sections that exempt it from providing such information.

The central bank said that the disclosure would affect the economic interests of the state as the information sought could shake public faith in the system. It also stated that inspections often bring out the weaknesses in financial institutions, systems and managements of the inspected entities.

To back the denial of information, the public information officer provided an order of the full bench by the CIC. The commission, however, stated that the RBI needed to know what kind of fiduciary relationship. Since it was a statutory duty, information should be provided, the commission said.

The commission quoted the judgment in the state of UP v/s Raj Narain case: “In a government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing. Their right to know, which is derived from the concept of freedom of speech, though not absolute, is a factor which should make one wary when secrecy is claimed for transactions which can at any rate have no repercussion on public security.”

Therefore, the commission asked the RBI to provide all the information stating, "The best check on arbitrariness, mistakes and corruption is transparency, which allows thousands of citizens to act as monitors of public interest.”

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