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CIC Stays RBI Order Directing Bank To Disclose RTI Information On NPAs & Top Defaulters

Shrutika Pandey
8 July 2021 7:45 AM GMT
CIC Stays RBI Order Directing Bank To Disclose RTI Information On NPAs & Top Defaulters
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The Central Information Commission (CIC) has stayed the order of the First Appellate Authority (FAA) of the Reserve Bank of India (RBI) which had directed the disclosure of information on non-performing assets (NPAs) and top defaulters of the Saraswat Co-operative Bank Limited. CIC Suresh Chandra passed the order in an appeal filed by Saraswat Bank against the RBI direction.The RBI's FAA...

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The Central Information Commission (CIC) has stayed the order of the First Appellate Authority (FAA) of the Reserve Bank of India (RBI) which had directed the disclosure of information on non-performing assets (NPAs) and top defaulters of the Saraswat Co-operative Bank Limited. CIC Suresh Chandra passed the order in an appeal filed by Saraswat Bank against the RBI direction.

The RBI's FAA issued the direction to the bank in an RTI application filed by former Commissioner Shailesh Gandhi, seeking information on Saraswat Co-operative Bank Ltd for the last three years.

The application requested copies of RBI's audit reports and inspection reports, warnings or advisories issued to the bank, fines or penalties levied on the bank, the grade allotted to the bank, its total non-performing assets, the report on the quality of borrowers, and the list of its top five defaulters with the amounts of default.

The First Appellate Authority ordered the release of the information sought. However, Saraswat Co-operative Bank Limited preferred an appeal before the Second Appellate Authority citing confidentiality. They submitted,

"If the information, which is confidential in nature, once disclosed, irreparable damage and huge loss will be caused to the Appellant."

After that, based on the facts and circumstances of the case, the CIC ordered,

"The appellant has prayed for an interim order restraining the CPIO/FAA from releasing the information in terms of RTI application. In terms of the prayer, the second appeal is admitted and keeping in view of the urgency, the operation of the FAA's order dated 15.2.2021, mentioned in Para 1 above, is stayed till further orders."

In July, the CIC passed a similar stay order in an appeal preferred by the South Indian Bank, where the bank urged that if the information is released, it will lead to "irreparable loss/injury to the Appellant and make their pending appeal infructuous."

The State Bank of India, Punjab National Bank,  Union Bank of India, HDFC Bank, ICIC Bank have approached the Supreme Court challenging the RTI notices by the Reserve Bank of India to disclose information related to defaulters list and inspection reports under Section 11(1) Right to Information Act. The Supreme Court refused to stay the RTI notices as interim relief and issued notice on the petition.

The RBI issued the notices based on the 2015 Supreme Court judgment in the case of Reserve Bank of India v Jayantilal N. Mistry, which held that the RBI was obliged to disclose defaulters list, inspection reports, annual statements etc., related to banks under the RTI Act. In April, a bench comprising Justices L Nageswara Rao and Vineet Saran dismissed the applications filed by banks for recalling the Jayantilal Mistry judgement.

"There is no provision in the Supreme Court Rules for filing any application for recall of the judgment of this Court", the bench had observed.

Title: Saraswat Coop Bank Ltd. v. CPIO: Reserve Bank of India

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