Ex-CIC hails move to bring transparency in RBI's functioning

Former CIC Shailesh Gandhi has hailed Governor Raghuram Rajan's move to bring in transparency in the Reserve Bank's functioning, but cautioned that it will happen only when RBI follows the Supreme Court's recent judgment in letter and spirit with regard to furnishing information on commercial banks.
Drawing a parallel between Rajan's New Year message to the RBI staff and the CIC orders against RBI between September 2011 and March 2012, Gandhi said, "In almost 10 cases of hearing, I had ordered RBI to furnish information related to investigations and audit reports of banks...
"... Warnings or advisories issued, minutes of governing board meetings, names of top defaulters and grading of banks, among others, should be given under RTI."

Gandhi was part of the CIC when these orders were issued against the RBI.
"But the central bank has challenged all these orders in higher courts claiming that it is exempt from the RTI purview since those information are needed to discharge its fiduciary duties, and that disclosing it would prejudicially affect the economic interests of the nation," Gandhi told PTI.
In his New Year message to RBI employees, Rajan advised them to ensure that the central bank is not seen as a "paper tiger" and also to ensure that the rich and powerful wrongdoers are not spared.

"We are embedded in a changing community. What was OK in the past is no longer all right when the public demands transparency and better governance from public organisations," Rajan said in his internal mail.

On December 17 last, a two-judge bench of the Supreme
Court comprising Justices M Y Eqbal and C Nagappan said the RBI was accountable to disclose information under RTI Act.
The apex court clarified that RBI cannot withhold information under the "guise" of confidence or trust with financial institutions and is accountable to provide information sought by general public.
Furthermore, the RTI Act under Section 2(f) clearly provides that the inspection reports, documents etc fall under the purview of 'information' which is obtained by the public authority (RBI) from a private body," the bench said.
The apex court also termed as "misconceived" the RBI submission that disclosure of such information will go against the economic interest of the nation, saying "the 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."
Gandhi said though Rajan has not mentioned the SC order in the message, it imbibes spirit of the court order.
"I hope this is the harbinger of a change towards greater transparency and accountability which will be emulated by other government agencies," he said.