The Right to Information (RTI) Act 2005, non-performing assets (NPA), and the right to privacy are all significant matters concerning the financial sector in India. Recently, a significant development has come to light as various banks seek exemption from RTI, leading to a potential conflict of interests. This article aims to delve deep into the issue and provide an easy-to-understand explanation.
The Request for Exemption
News recently emerged that the Supreme Court has agreed to examine a plea by various public and private sector banks seeking exemption from RTI. The banks wish to withhold disclosure of specific financial information relating to non-performing assets (NPAs), losses from trading operations, show-cause notices, and penalties.
The Origin of the Issue
The legal fight for the disclosure of inspection reports and defaulters list started when RTI activist Jayantilal Mistry sought information under the RTI Act, 2005, regarding a Gujarat-based cooperative bank in 2010. The appeals made by Mistry were not entertained by several layers of the RTI process, and the matter escalated to the Supreme Court.
The Supreme Court’s 2015 verdict
In 2015, the Supreme Court criticised the Reserve Bank of India (RBI) for attempting to keep the inspection reports and defaulters list confidential. This led to the public disclosure of such documents. The Supreme Court stated that the RBI had no legal duty to maximise the benefit of any bank and there was no ‘trust’ relationship between them. The court reasoned that the RBI was obligated to uphold the public interest by revealing these details under RTI. Following the court order, the central bank allowed these reports to be made public.
Late Take on the Right to Privacy
Recently, the Supreme Court recognized that the 2015 judgment did not consider the aspect of balancing the right to information and the right to privacy. As a response, the court feels duty-bound to provide banks an opportunity to argue their case on merits.
Arguments Presented by Banks
Banks have expressed concerns about adverse remarks from the regulator (RBI), fearing it will affect their performance and turn customers away. They argue that the ‘trust and faith’ of their clients should not be made public. Furthermore, they contend that privacy is a fundamental right and should not be violated by making clients’ information public.
Understanding the RTI Act, 2005
The Right to Information Act or RTI is legislation that allows citizens to obtain information from a public authority, thereby increasing transparency and accountability. Section 8 of the RTI ACT deals with exemption from disclosure of certain types of information, including those that could compromise the sovereignty and integrity of India, information forbidden to publish by a court of law, and more.
This ongoing issue is of national significance, with potential ramifications for the banking sector and the public’s right to information. The final verdict from the Supreme Court will undoubtedly influence the balance between transparency, privacy, and financial stability in India.
