Banks approaches CIC against RBI’s NPA disclosure

Four major banks — Bank of Baroda, RBL Bank, Yes Bank and State Bank of India — have approached the CIC objecting to the disclosure of information such as the list of defaulters and NPA, penalties and inspection reports, even as the RBI termed the records “liable to be disclosed” under the RTI Act.

RTI applicants Dheeraj Mishra, Vathiraj, Girish Mittal and Radha Raman Tiwari had filed separate applications with the RBI, seeking information, such as the top 100 NPAs, willful defaulters of Yes Bank, the inspection report of the SBI and RBL, and documents relating to a Rs 4.34 crore monetary penalty imposed following statutory inspection findings from the Bank of Baroda, respectively, among others.

These banks appealed before the Central Information Commission, after the bankers’ bank found that the information sought by RTI Applicants could be disclosed under the provisions of the Right to Information Act. Information Commissioner Khushwant Singh Sethi referred the matter to a larger bench of the CIC to adjudicate on the issues raised by the banks.

In a series of interim orders, Sethi noted that similar matters were earlier heard by a double bench. Consequently, all cases have been referred to the Chief Information Commissioner for consideration by a larger bench, with disclosure stayed till final decisions are issued.

The outcome of these proceedings is expected to have a far-reaching impact on banking transparency, depositor rights and regulatory accountability, particularly at a time when public scrutiny of NPAs, penalties and supervisory lapses remains intense.

The RBI had sought the views of the banks before disclosure under the Third Party consent provision under Section 11 of the transparency law, under which a public authority seeks the view of the party whose details are being sought by the applicant.

The banks approached the CIC, the country’s highest appellate body in RTI matters, with their appeals challenging the RBI’s view, which said the information was “liable to be disclosed” under the provisions of the RTI Act, citing the Supreme Court judgement in the Jayantilal N Mistry case, which is binding on it.

The banks claimed that disclosing regulatory information would harm their commercial interests. In one such case, Bank of Baroda (BoB) challenged the RBI’s decision to disclose documents relating to a Rs 4.34 crore monetary penalty imposed following statutory inspection findings.

RTI applicant Radha Raman Tiwari had sought copies of “cases of non-compliance, as recorded in Statutory Inspection for Supervisory Evaluation (ISE 2021),” along with show-cause notices and records evidencing recovery of the penalty While BoB objected to disclosure, claiming the information was “confidential and sensitive,” the RBI rejected the argument outright.

The RBI Central Public Information Officer (CPIO) recorded that the bank’s contention that disclosure “may harm the bank’s business, marketability of the bank’s product and may hamper the competitive position of the bank, is not tenable.” The RBI further noted that information exempt under Sections 8(1)(d), (e) and (j) of the RTI Act had already been identified and severed, and therefore “the objections of the BoB are not sustainable”.

BoB has since moved the Supreme Court, arguing that the landmark Jayantilal N Mistry judgment, which mandates disclosure of RBI inspection reports, may be reconsidered. Taking note of this, the CIC observed that the issue “needs deliberation by a larger bench” and temporarily stayed disclosure until final adjudication. A similar dispute arose involving RBL Bank, which objected to the disclosure of its inspection reports for 2013-14 and 2016-17 sought by RTI applicant Vathiraj.

The RBI, however, relied heavily on Supreme Court precedent, saying that “there is no fiduciary relationship with the RBI and other banks” and that inspection reports fall squarely under the RTI Act. Quoting the Supreme Court’s contempt proceedings in a case, the RBI highlighted that the order had said,”the Respondents are duty-bound to furnish all information relating to inspection reports; Any further violation shall be viewed seriously by this Court”.

RBL Bank contended that earlier CIC observations suggested waiting for the outcome of pending writ petitions. The Commission, however, noted that no stay had been granted by the Supreme Court and that the governing law remains unchanged. As in other cases, the matter has now been referred to a larger bench, and disclosure has been deferred.

Yes Bank has also approached the CIC, objecting to the disclosure of data relating to the top 100 NPAs, willful defaulters, and inspection reports of public sector banks sought by Dheeraj Mishra. The RBI rejected Yes Bank’s confidentiality argument, saying unequivocally that “RTI Act, 2005, overrides all earlier laws in order to achieve its objective”.

The RBI further observed that the Supreme Court had explicitly upheld disclosure of defaulters’ lists, noting that “there is no ambiguity in the judgement’ inspection reports and other material’ have to be furnished”. Despite this, Yes Bank argued that the Jayantilal Mistry ruling is in doubt. The CIC noted that similar matters had already been decided and again referred the issue to a larger bench, while restraining disclosure for now. In another case, the State Bank of India (SBI) opposed the disclosure of show-cause notices and RBI’s enforcement actions from April 2015 onwards demanded by Girish Mittal in his RTI application.

The RBI held that such documents were “liable to be disclosed” after severing exempt portions under Section 10 of the RTI Act. The SBI argued that the Supreme Court had not examined exemptions under Section 8(1)(j). The RBI countered this by pointing out that the apex court had clearly ruled that it is “not in a fiduciary relationship with any bank” and must uphold public interest.