Shri D. Sethi, GM, Ms. M. Kuttykrishnan, Asstt. Legal Adviser & Ms. Divya Sood Daur, General Manager at CIC. ADJUNCT ORDER

Transcription

1 Central Information Commission Room No.307, II Floor, B Wing, August Kranti Bhawan, Bhikaji Cama Place, New Delhi websitecic. gov.in Appeal: No. CIC/VS/A/2013/002002/MP Appellant : Public Authority : Shri S.S. Vohra, Mumbai. Reserve Bank of India, Mumbai. Date of Hearing : 07 th April, Date of Decision : 27 th May, Present: Appellant: Present at CIC. Respondent: Shri D. Sethi, GM, Ms. M. Kuttykrishnan, Asstt. Legal Adviser & Ms. Divya Sood Daur, General Manager at CIC. ADJUNCT ORDER The appellant, Shri S.S. Vohra, submitted RTI applications dated and before the Central Public Information Officer, Reserve Bank of India (RBI), Mumbai seeking information regarding methods or systems followed by the banks for money laundering etc. in the context of sting operations on bank executives of three leading private banks i.e. HDFC, ICICI and Axis Bank through 31 points. The respondents denied file noting, action taken by the RBI under the provisions of section 8(1) (a), (d) and (e) of the RTI Act, The Commission vide its interim order of even number dated adjourned the matter in view of specific directions issued by Hon ble High Court of Delhi interim order dated in the case RBI Vs. Ashwini Dixit (WP(C) 1976/2012) directing the Commission not to hear such matters till the final out CIC/VS/A/2013/002002/MP 1

2 come of the writ petition. 3. On the transfer petition filed by the RBI, in T.P. Nos before the Hon ble Supreme Court of India for transfer similar writ petitions pending before the Hon ble Bombay High Court and Hon ble Delhi High Court, the Hon ble Supreme Court of India vide its judgment dated , while allowing disclosure of inspection reports conducted by the RBI on banks to the general public held para 63..In the present case, we have to weigh between the public interest and fiduciary relationship (which is being shared between the RBI and the Banks). Since, the RTI Act is enacted to empower the common people, the test to determine limits of Section 8 of the RTI Act is whether giving information to the general public would be detrimental to the economic interests of the country? To what extent the public should be allowed to get information? 64. In the context of above questions, it had long since come to our attention that the PIO under the guise of one of the exceptions given under section 8 of the RTI Act, have evaded the general public from getting their hands on the rightful information that they are entitled to 65. And in this case the RBI and the Banks have sidestepped the general public s demand to give the requisite information on the pretext of fiduciary relationship and economic interest. This attitude of the RBI will only attract more suspicion and disbelief in them. RBI as a regulatory authority should work to make the banks accountable in their actions 4. In view of above judgement of the Hon ble Supreme Court of India, the CIC/VS/A/2013/002002/MP 2

3 matter was heard by the Commission on The appellant stated that the information was denied by the respondents under the provisions of Section 8(1)(a)(d) and (e) of the RTI Act, He sought the methods of money laundering adopted by all banks of the country (converting black money into white), complete details along with documentary proof. The banks had flouted PAN, KYC norms etc. and opened the accounts on the basis of passports only. He sought information regarding opening of benami accounts all over India by three banks, the total transaction in money value, fee charged by banks, name and designation of bank officials involved and action taken by RBI for the last ten years from and also sought whether RBI had informed other agencies to proceed against money laundering cases on its own, in spite of GOMs directive. He stated that he wanted to know the number of banks who indulged in money laundering. He requested the Commission to direct the respondents to provide inspection reports/file notings for two years prior to 2013 in respect of HDFC, Axis Bank, HDFC Bank, ICICI, Indian Bank, Punjab National Bank, Bank of Baroda and Canara Bank. 4.1 The written submissions filed by the appellant during the hearing, were provided to the respondents and the Commission directed the respondents to submit their written submissions. In compliance with the directions of the Commission, the CPIO vide letter dated submitted her submissions, which inter-alia states as under: In the written submissions, it was urged by the appellant that since the objections raised by Reserve Bank of India were well settled by the Supreme Court of India in TC Nos 91 to 101 of 2015 filed by Reserve Bank of India, the respondent (RBI) ought to give complete information as requested for and CIC should direct Reserve Bank of India to give complete information to the appellant. The appellant had sought information on modus operandi used for money laundering by banks. Such information is, as such, not available. Under the RTI Act, 2005, a public authority was expected to provide only that CIC/VS/A/2013/002002/MP 3

4 information which it holds. The RTI Act does not mandate a public authority to compile or create information for the purpose of replying to an applicant. It was not very clear what exactly the complainant intends to submit before this Commission. They stated that the press releases issued by RBI with regard to issuance of penalties gave detailed information regarding violation observed during the course of scrutiny/ inspection. During the hearing of the appeal before this Hon ble Commission, the appellant had requested for inspection report and complete details of the file notings, correspondence between RBI and banks, HDFC Bank, Axis Bank, ICICI Bank, BOB, Canara Bank, Indian Bank, PNB for two years prior to With regards to Inspection/Scrutiny Reports, correspondence, file noting, they stated that the information related to the banks customers, transactions, account related details, their deposits and advances, their documents etc. the disclosure of which violated the customer confidentiality clauses of the banks with their customers. The appellant was trying to obtain the customer related information through RTI Act, which he could not obtain from the banks as banks are prohibited from disclosing the customer related information under the respective Statutes. Thus, it was nothing but to abuse the process of law. The disclosure of such personal information of customers was exempt from disclosure under section 8 (1) (j) of the RTI Act, 2005 as it would cause unwarranted invasion of privacy. Section 8 (1) (j) of the RTI Act, 2005 provides that it is for the CPIO/FAA to decide whether the disclosure of personal information is justified in the interest of the larger public interest or it would cause unwarranted invasion of privacy of individual. Inspection Reports related correspondence of the banks also contained information related to business strategies, product pricing strategies, risk management practices and gaps, details of liquidity positions, IT systems etc. The disclosure of the requested information was not in the economic CIC/VS/A/2013/002002/MP 4

5 interests of the state and would adversely affect the competitive position of the third party (bank). The information was therefore exempt from disclosure under Section 8 (1) (a) and (d) of the RTI Act, Further, the exempt information was inextricably intertwined throughout the reports. Each of reports ran into several pages. The severance would be extremely laborious and time consuming exercise and hence would require several man-hours. As regards benami transaction, the CPIO stated that the information sought was not readily available. However, information might be available in the Inspection/ Scrutiny Report of individual banks. No specific file was kept where such information is recorded, consolidated and filed. The CPIO stated that RBI examines KYC/AML aspects only, investigative agencies can establish the money laundering aspect. Hence, they do not have any information on this. On multiple accounts closed at short intervals, it is submitted that this information is not available with RBI. With regard to prayer of the complainant that where information was not available but can be called under various laws shall be provided to him, it was submitted that the RTI Act did not mandate a public authority to compile or create information for the purpose of replying to an applicant. Regarding action taken by banks against their staff, the CPIO stated that examination of staff accountability was governed by the internal policies of the bank, to be duly approved by its Board. Whenever instances of violations were observed during any supervisory exercise, suitable action was initiated against the bank by RBI. However, details of frauds committed including staff involvement are reported in FMR returns. In view of the above submissions, the CPIO stated that the Hon ble Commission may be pleased to dismiss the appeal as being frivolous and vexatious in nature and devoid of any merit. 5. The Hon ble Supreme Court of India vide its judgment dated held that Para 58. In the instant case, the RBI does not place itself in a fiduciary CIC/VS/A/2013/002002/MP 5

6 relationship with the Financial institutions (though, in word it puts itself to be in that position) because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the Banks act in the interest of each other. By attaching an additional fiduciary label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem effect Para 59. RBI is a statutory body set up by the RBI Act as India s Central Bank. It is a statutory regulatory authority to oversee the functioning of the banks and the country s banking sector. Under Section 35A of the Banking Regulation Act, RBI has been given powers to issue any direction to the banks in public interest, in the interest of banking policy and to secure proper management of a banking company. It has several other far-reaching statutory powers Para 60. RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of trust between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein para 63..In the present case, we have to weigh between the public interest and fiduciary relationship (which is being shared between the RBI and the Banks). Since, the RTI Act is enacted to empower the common people, the test to determine limits of Section 8 of the RTI Act is whether giving information to the general public would be detrimental to the economic interests of the country? To what extent the public should be allowed to get information? 64. In the context of above questions, it had long since come to our attention that the PIO under the guise of one of the exceptions given CIC/VS/A/2013/002002/MP 6

7 under section 8 of the RTI Act, have evaded the general public from getting their hands on the rightful information that they are entitled to 65. And in this case the RBI and the Banks have sidestepped the general public s demand to give the requisite information on the pretext of fiduciary relationship and economic interest. This attitude of the RBI will only attract more suspicion and disbelief in them. RBI as a regulatory authority should work to make the banks accountable in their action. 6. In view of the aforementioned judgment of Hon ble Supreme Court of India dated the Commission directs the CPIO to provide inspection reports/file notings for two years prior to 2013 in respect of HDFC Bank, Axis Bank, ICICI Bank, Bank of Baroda, Canara Bank, Indian Bank, Punjab National Bank and the number of banks who indulged in money laundering to the appellant, severing third party information, if any, within three weeks of the receipt of the order of the Commission. The appeal is disposed of. Authenticated true copy: (Manjula Prasher) Information Commissioner Deputy Registrar Address of the parties: Central Public Information Officer Reserve Bank of India Deptt. of Banking Supervision, Central Office, Cenhtre1, Cuffe Parade, Colaba, Mumbai CIC/VS/A/2013/002002/MP 7

8 The Executive Director/FAA Reserve Bank of India Deptt. of Banking Supervision, Central Office, Cenhtre1, Cuffe Parade, Colaba, Mumbai Shri S.S. Vohra, 4572, Bldg. No. 129, New Tilak Nagar, Chembur, Mumbai CIC/VS/A/2013/002002/MP 8