Battle over NPAs: BoB, SBI, RBL and Yes Bank move CIC against RTI orders, RBI backs disclosure

Four major banks – Bank of Baroda, RBL Bank, Yes Bank and State Bank of India – have approached the Central Information Commission (CIC) to object to the disclosure of sensitive regulatory information such as lists of defaulters, non-performing assets (NPAs), inspection reports and sanctions-related documents, even as the Reserve Bank of India (RBI) has maintained that the records are “subject to disclosure” under the Right to Information (RTI) Act, according to a PTI report.

The objections arise from several RTI applications filed by applicants Dheeraj Mishra, Vathiraj, Girish Mittal and Radha Raman Tiwari, who sought details including top 100 NPAs and willful defaulters of Yes Bank, inspection reports of SBI and RBL Bank and documents related to a fine of Rs 4.34 crore imposed on Bank of Baroda following the findings of the statutory inspection.

After considering the requests, the RBI concluded that the information could be disclosed under the RTI Act and sought the banks’ views under the third-party consultation provision of Section 11. Disagreeing with the RBI’s position, the banks challenged the decision before the CIC, arguing that disclosure would harm their commercial interests and expose confidential supervisory information, the PTI report added.

Information Commissioner Khushwant Singh Sethi has now referred all cases to a larger bench of the ICC, citing the importance of the issues involved and the fact that similar issues had previously been considered by a dual bench. Disclosure has been suspended until the final decision.

The RBI has always relied on the Supreme Court’s landmark 2015 decision in Jayantilal N Mistry v RBI that inspection reports, lists of defaulters and associated supervisory information must be disclosed in the larger public interest and that the RBI does not hold such information in a fiduciary capacity for banks, the report said.

What the banks say

In one case, the Bank of Baroda objected to the disclosure of documents relating to a penalty of Rs 4.34 crore imposed after regulatory inspections. The RBI rejected the bank’s contention that the disclosure would harm its business or competitive position, noting that the information exempted under sections 8(1)(d), (e) and (j) of the RTI Act had already been removed. Bank of Baroda has since moved the Supreme Court seeking review of the Jayantilal N Mistry judgment.

RBL Bank also objected to the disclosure of its inspection reports for 2013-14 and 2016-17. The RBI countered that Supreme Court precedent remained binding and cited contempt of court proceedings in which the apex court warned that non-disclosure of inspection reports would be viewed seriously. Although it noted that no stay was granted by the Supreme Court, the ICC referred the case to a wider jurisdiction.

Yes Bank has challenged the proposed disclosure of its major NPAs, willful defaulters and inspection reports, even as the RBI reiterated that the RTI Act prevails over all previous laws and the Supreme Court has explicitly upheld the disclosure of such information.

The State Bank of India, on the other hand, objected to the issuance of show cause notices and enforcement action by the RBI from April 2015. The RBI held that the documents could be disclosed after separating the exempted parties, emphasizing that it did not have a fiduciary relationship with the banks and had to act in the public interest.