RBI’s Inspection Reports Under RTI

Supreme Court’s landmark judgment has made all banks including J&K Bank accountable 

Dr Raja Muzaffar Bhat

THE Supreme Court of India in one its recent orders rightly dismissed several applications made by some private and public sector banks praying for recalling the 2015 judgment against the Reserve Bank of India (RBI) vis a vis making it accountable under Right to Information Act (RTI). The Supreme Court had directed the RBI to make its annual inspection reports and loan defaulters list public under RTI Act 2005. The court in its detailed judgment said that Reserve Bank of India (RBI) was duty-bound to uphold the public interest by revealing these details under RTI.

The recall applications were filed by several banks which included State Bank of India (SBI). The case was listed before a Supreme Court division bench of Justices L Nageswara Rao and Vineet Saran. The banks argued that the SC’s  judgment had not considered important legal and constitutional provisions. They said that the order was violating the “right to privacy”, which has been held to be an inseparable part of the fundamental right to life and personal liberty under article 21 the Constitution of India as per its Justice K S Puttaswamy judgement.

A close scrutiny of the applications for recall makes it clear that in substance, the applicants are seeking a review of the judgment in Jayantilal N.Mistry (supra). Therefore, we are of the considered opinion that these applications are not maintainable. We make it clear that we are not dealing with any of the submissions made on the correctness of the judgment of this Court in Jayantilal N Mistry,” the court observed.

The court further opined that the RBI must act with transparency and not hide information that might embarrass banks and that it is duty-bound to comply with the provisions of the RTI Act and disclose the information. While examining its previous judgment, the court also held that there was no provision in the Supreme Court Rules for a recall of the judgment.

The court added that parties should not be allowed to file applications to reopen concluded judgments of the court.

Case details 

An RTI activist named Jayantilal Mistry from Gujrat way back in 2010 had sought information under RTI Act 2005 from the RBI about a Gujarat-based cooperative bank. The information pertained to the annual inspection reports prepared by RBI which had not been put into public domain. Mistry filed an application under RTI Act 2005 in October 2010 before the Central Public Information Officer (CPIO) of Reserve Bank of India (RBI). The RBI, however, did not provide the requested details. Information seeker Jayantilal Mistry then filed an appeal before the designated First Appellate Authority (FAA) of the RBI. On March 30th, 2011, the FAA disposed of the appeal by upholding the order of the CPIO. Aggrieved information seekers finally filed 2nd appeal  before the Central Information Commission (CIC) New Delhi. The CIC in its judgment November 1st ,  2011 order, directed the RBI to provide information before 30th November 2011.

Aggrieved by the decision of the CIC, the Reserve Bank of India (RBI) filed a writ petition before the Delhi High Court for quashing of the CIC’s judgment. The High Court, while issuing notice, stayed the operation of CIC’s order. The matter was finally challenged before the Supreme Court of India.

The Information Sought

In addition to Jayantilal Mistry several other RTI applications were filed before the RBI seeking copies of inspection reports of various public and private sector banks, alongside a list of bank loan defaulters. A statutory inspection was conducted by RBI inspectors between May 2010 to June 2010 in the Makarpura Industrial Estate Cooperative Bank Ltd in Gujarat. This inspection had been conducted by the RBI under the Banking Regulation Act (BRA). Subsequently, in October 2010, Jayantilal Mistry had sought the information on the following points from the RBI via an RTI application:

  1. Procedure, rules and regulations of inspection being carried out on cooperative banks.
  2. Last RBI investigation and audit report carried out by Shri Santosh Kumar from 23rdApril 2010 to 6th May 2010 that was sent to the Registrar of the Cooperative of Gujarat state.
  3. Last 20 years inspection report carried out in Makarpura Industrial Estate Cooperative Bank Ltd along with names of inspectors and action taken report.
  4. Reports on all cooperative banks went on liquidation plus action taken against all Managers and Directors for recovery of public funds and powers utilized by RBI and analysis and procedure adopted.
  5. Names of remaining cooperative banks under your observation for irregularities and action taken reports.
  6. Specify the time period required to take action and implementation.

To the first question, the CPIO said that RBI was conducting the inspection under section 35 of the Banking Regulation Act, 1949 at regular intervals. The second question was not answered, with the CPIO invoking section 8(1)(a) and (e) of the RTI Act to claim that that information was held by the RBI under fiduciary relationship, and thus could not be revealed under the transparency law.

For the third and fourth questions, the same exemption clause was invoked by the CPIO, and to the final two questions, the CPIO simply responded with “no specific information has been sought.”

J&K Bank again Denies Information 

This author has been fighting a  long battle with the policies adopted by Jammu & Kashmir (J&K) Bank in past especially to deny information under RTI Act. For many years, JKB claimed that it was not a public authority. A full bench of the erstwhile J&K State Information Commission (SIC), headed by the then State Chief Information Commissioner (CIC) G R Sufi in a detailed judgment in 2012 had declared the J&K Bank as a public authority.

However, the J&K Bank, like the RBI, stayed the operation of the SIC’s order before the High Court of Jammu & Kashmir. In 2019, the J&K Government headed by the then Governor Satyapal Malik decided to bring this bank under the ambit of the J&K RTI Act 2009 (now repealed).

It is pertinent to mention that the J & K government is a majority shareholder in the bank, with a 59.3 percent stake.  In 2018, when the J&K Bank sold its two non-performing assets (NPAs) of a few top business houses to an asset reconstruction company (ARC) at a 40 % discount, which worked out to Rs. 720 crores, I wrote a piece on the issue in a local English daily in January 2019, in which I demanded a probe into the matter.

A few days after the publication of the article, I was issued a show-cause notice by the legal wing of the J&K Bank asking me to apologize for bringing “disrepute” to the bank. When I refused to apologize and wrote a counter-response to the bank, a defamation suit for Rs. 60 crores were filed against me by the J&K Bank in a Srinagar court. The court ordered that I should not write anything defamatory against the bank, which I never did! I had never defamed the bank or any official by name , infact my intention was to ensure transparency in the functioning of this bank.

During one of the hearings of the case just before the abrogation of article 370 when the impugned article was placed before the Additional District and Sessions Judge, Srinagar, he made an open comment in the court that, raising issues related to transparency and accountability in J&K Bank can’t be related to defamation. The lady counsel of J&K Bank could not utter a word in response.

When the defamation case was filed against me, the bank had already been brought under the RTI Act’s ambit by the-then State Administrative Council (SAC) headed by former Governor Satyapal Malik in November 2018. My claim about corruption and mismanagement in the J&K Bank was authenticated in June 2019, when the J&K Anti-Corruption Bureau (ACB) raided the bank’s corporate office. The Chairman of the bank was sacked by the J&K government a day before the raid, and very recently, he was arrested  by the ACB in a separate matter.

J&K Bank’s Repeated Denial 

Even after all this, the J&K Bank continues to deny information under the RTI Act. Some months back, a citizen named Mohammad Ramzan from Srinagar sought details of funds spent on advertisements by the J&K Bank. Through an RTI application, he asked for a list of beneficiaries like media houses, private channels, FM radio stations, newspapers, online news portals, and other media platforms, that were provided these advertisements against payment of huge money.

In his reply, the PIO of the J&K Bank corporate office said that the list of such beneficiaries could not be provided. He invoked various sub-sections of section 8 of the RTI Act.

Technically, the J&K Bank is supposed to make such a beneficiary list public through its website as mandated under section 4(1)(b) of the RTI Act. This clearly indicates that the bank is not ready to ensure transparency and openness, in spite of the fact that several cases against it are already pending before various anti-corruption agencies. Mohammad Ramzan filed an appeal before the FAA of the J&K Bank corporate office. The appeal has not been adjudicated till date. He is now planning to file 2nd appeal before the Central Information Commission (CIC) New Delhi.


In its 2015 judgment, the Supreme Court has made a detailed reference to section 2(f) of the RTI Act 2005 which in detail explains what an information means . The RBI collects inspection reports from various banks. Since these reports fall within the definition of ‘information’, the same must be provided to citizens. Ideally, the RBI should make these reports public through its website.By dismissing the recall application, the apex court, in its supreme wisdom, has made it clear that citizens have every right to make banking institutions accountable, especially at a time when big loan defaulters lists and inspection reports are always kept confidential by banks. This order applies to Jammu  & Kashmir Bank as well.

Views expressed in the article are the author’s own and do not necessarily represent the editorial stance of Kashmir Observer

Dr Raja Muzaffar Bhat is an Acumen fellow. He is Founder & Chairman of Jammu & Kashmir RTI Movement 


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Dr Raja Muzaffar Bhat

Dr Raja Muzaffar Bhat is an Acumen Fellow and Chairman Jammu & Kashmir RTI Movement. Feedback [email protected]

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