SC seeks response from RBI, banks on disclosure of reports

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The order had, in effect, stayed the apex court’s April 26, 2019 order that had asked the central bank to reveal information sought under the Right to Information (RTI) Act pertaining to banks’ annual inspection reports.The Supreme Court on Monday sought response from the RBI and banks as to why it should not recall its earlier order that allowed the banking regulator not to disclose inspection, risk assessment, and annual financial inspection reports of the banks including SBI. A bench led by Justice SA Nazeer issued notice to the RBI, SBI, HDFC Bank, ICICI Bank and others on a plea seeking recall of the Supreme Court’s December 18, 2019 order that had asked the RBI not to make public any inspection reports, risk assessment reports and financial inspection reports of banks until further orders. The direction against disclosure had come on an application filed by banks, which said such information cannot be shared without first giving them an opportunity to oppose it.The order had, in effect, stayed the apex court’s April 26, 2019 order that had asked the central bank to reveal information sought under the Right to Information (RTI) Act pertaining to banks’ annual inspection reports. The Supreme Court in its April order had expressed displeasure over the RBI’s refusal to reveal the documents sought under the RTI Act. It had mandated the RBI in 2015 to release such information under the transparency law or risk contempt of court. It had held that that the banking regulator was bound to comply with the RTI Act and disclose information.Refusing to disclose banks’ annual inspection reports as directed by the Supreme Court under the RTI Act, the RBI had said that it had the discretion to provide details depending on the nature of information and the consequences it will have in the economic interests of the country. It had said that the regulator should be permitted to decide each application on a case-to-case basis. “Making an outright obligation to disclose inspection reports may violate many laws of confidentiality imposed by other statutes as banks are institutions run on public confidence,” RBI said.“The inspection reports contain risk rating of the bank, risk of failure, capital adequacy and solvency, financial ratio and measurements where the supervisor assesses the relative deterioration and improvements witnessed over comparative periods. Disclosure of such facts may result in unwarranted panic and misinformation and could actually trigger a run on bank as such info is often amplified by the media,” RBI told the apex court.

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