RBI Must Disclose Financial Information Regarding Banks according to a latest judgement by the Indian Supreme Court

The court dismissed a joint plea by the Central government and 10 banks seeking a recall of the 2015 judgment, consequently negating its interim order that stayed the release of the inspection reports of banks.

Striking a blow for financial transparency in the banking system, the Supreme Court on Wednesday revived its 2015 judgment making it necessary for the Reserve Bank of India (RBI) to disclose financial information regarding private and public banks under the Right To Information (RTI) Act.

The court dismissed a joint plea by the Central government and 10 banks seeking a recall of the 2015 judgment, consequently negating its interim order that stayed the release of the inspection reports of banks.

A bench of justices L Nageswara Rao and Vineet Saran held that the applications for recall were not maintainable and were an attempt to seek reconsideration of the 2015 judgment, which broke new grounds by opening up under the purview of the sunshine law, information relating to Non-Performing Assets (NPAs) or bad loans , losses from trading operations, even show-cause notices and fines imposed by RBI.

The applications for recall were filed by the Union government, State Bank of India, Punjab National Bank, HDFC Bank, Bank of India, Canara Bank, Bank of Baroda, Uco Bank, Indian Bank, Kotak Mahindra and AU Small Finance Bank.

Through its landmark verdict in 2015, the apex court dismissed objections that RBI held financial information about the banks in a fiduciary capacity while making it clear that the banking regulator must act with transparency and not hide information that might embarrass the individual banks.

Subsequently, RBI came out with disclosure policies in 2016 and 2019 that sought to dilute the impact of the court verdict. But after the apex court initiated contempt proceedings against RBI, the regulator rolled back the 2019 policy.

Source: Hindustan Times news