[ By Bobby Anthony ]The Supreme Court has sought a response from the Reserve Bank of India (RBI) as well as banks about why it should not recall its earlier order which had allowed the RBI not to disclose inspection, risk assessment, as well as annual financial inspection reports of banks including the State Bank of India (SBI).The notice was issued to the RBI, SBI, HDFC Bank, ICICI Bank...
The Supreme Court has sought a response from the Reserve Bank of India (RBI) as well as banks about why it should not recall its earlier order which had allowed the RBI not to disclose inspection, risk assessment, as well as annual financial inspection reports of banks including the State Bank of India (SBI).
The notice was issued to the RBI, SBI, HDFC Bank, ICICI Bank and others based on a plea seeking recall of the Supreme Court’s December 18, 2019 order which had asked the RBI not to publicize any inspection reports, risk assessment reports or financial inspection reports of banks until further orders.
The SC order against disclosure had come in response to an application filed by banks, which had stated that such information could be shared without first giving them an opportunity to oppose it.
The SC order had effectively stayed the SC’s April 26, 2019 order which had asked the RBI to reveal information sought under the Right to Information (RTI) Act pertaining to banks’ annual inspection reports.
In its April 26, 2019 order, the SC had had expressed displeasure about the RBI’s refusal to reveal documents sought under the RTI Act.
In 2015, it had asked the RBI to release such information or risk contempt of court, holding that the RBI must comply with the RTI Act and disclose the information.
Refusing to disclose banks’ annual inspection reports as directed by the Supreme Court under the RTI Act,
However, the RBI had refused to do so and stated that it had the discretion to provide details depending on the nature of information since disclosing information would have affect the economic interests of the country.
The RBI had stated that it must be be permitted to decide each application on a case-to-case basis, adding that making an outright disclosure of inspection reports could also violate many laws of confidentiality imposed by other statutes, since banks are institutions run on public confidence.
Disclosure of inspection reports containing information like risk rating of the bank, risk of failure, capital adequacy and solvency could result in unwarranted panic and even trigger a run on banks especially after these are often amplified by the media, the RBI had told the Supreme Court.