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SC raps RBI in final warning over annual report

SC raps RBI in final warning over annual report
Supreme Court of India. (File)
New Delhi, Apr 26 (IANS) | Publish Date: 4/26/2019 12:21:28 PM IST

The Supreme Court on Friday gave the RBI “one last opportunity” to disclose annual inspection reports of banks as it just stopped short of issuing a contempt notice against RBI Governor Shaktikanta Das, and ordered the Reserve Bank of India to diclose the wilful defaulters’ list under the Right To Information Act.

The top court also ordered the central bank to withdraw its non-disclosure policy, which the court concluded is in violation of the apex court’s judgment in 2015.

Taking a serious view of the continued defiance, the court came down heavily asking the RBI to make full disclosure of its annual inspection reports on the financial health of banks, including position of NPAs, and also withdraw its disclosure norms as it came in the way of making public informations on the state of banks under the RTI.

A bench of Justice L. Nageswara Rao and Justice M.R. Shah said the banks are “duty bound to furnish all information relating to inspection reports and other material apart from the material that was exempted in para 77 of the judgement. Any further violation shall be viewed seriously by this Court.”

Pronouncing the judgment, Justice Nageswara Roa said, “Though we could have taken a serious view of the Respondents (RBI and the Banks) continuing to violate the directions issued by this Court, we give them a last opportunity to withdraw the disclosure policy insofar as it contains exemptions which are contrary to the directions issued by this Court.”

Referring to paragraph 77 of the December 16, 2015 judgement, the court said that the only exception that was carved out by the top court in its 2015 judgment was relating to the disclosure of information having bearing on “security of the State.”

Referring to the new disclosure policy that was uploaded by the RBI on April 12, 2019 replacing the earlier policy of November 30, 2016, the court said, “The respondents (banks) in our opinion, have committed contempt of this court by exempting disclosure of material that was directed to be given by this court.”

However, it recorded the submission by RBI that the new policy would be deleted from its website.

The top court by its December 16, 2015, judgement had said that banks and their apex regulatory body Reserve Bank of India could not withhold information on defaulters, losses and alleged illegalities of the banks by invoking the exception under the Right to Information Act.

“The ideal of ‘Government by the people’ makes it necessary that people have access to information on matters of public concern. The free flow of information about affairs of Government paves the way for debate in public policy and fosters accountability in Government. It creates a condition for ‘open governance’ which is a foundation of democracy”, the bench of Justice M.Y.EqbalAand Justice C. Nagappan (since both retired) had said in their 2015 judgement.

The RBI, as per 2015 judgement, was supposed to disclose the annual audit report of the banks, status of NPAs and action taken there on.

The top court by its 2015 order had asked the RBI to share information on the annual audit of the banks including on NPAs under the Right to Information Act.

However, this was stalled after RBI introduced disclosure norms that blocked the disclosure of information on the financial health of the banks under the RTI. An RTI activist Subhash Chander Agrawal had moved the top court seeking contempt action against RBI Governor for not complying with its 2015 judgement.

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