Make public RBI advisory note issued to ICICI: CIC

The Central Information Commission has directed the Reserve Bank of India to disclose an advisory note it issued to ICICI Bank for alleged violation of any RBI guidelines or for contravention of the provisions of money laundering and foreign exchange acts.

The case relates to an RTI application filed by S S Vohra, who had sought to know details of such advisory notes issued by the apex bank to Patna and Hong Kong branches of ICICI Bank.

ICICI Bank has objected the disclosure of the information citing three exemption clauses of the RTI Act section 8(1) (a), (d) and (e).

These section exempt disclosure of information which can -- prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic interests of the state, relation with foreign state or lead to incitement of an offence, is related to trade secrets and commercial confidence and is held in fiduciary capacity.

During the hearing, Vohra said the Finance Minister had made a written statement in Parliament that Patna branch of ICICI Bank Limited had opened some fictitious accounts for alleged fraudsters for which an advisory note was issued to it in December 2007.

Chief Information Commissioner Satyananda Mishra said there was "no merit in the contention that the advisory note issued by the RBI to the Bank in the present case will, by any stretch of imagination, fall under exemption clauses" cited by the bank

Rejecting the claims of ICICI Bank that such information may be personal in nature to customers and is held in fiduciary capacity by it, Mishra said opening of fraudulent accounts in a commercial bank is a grave concern and a major setback to financial system of the country.

"It would be rather too audacious on the part of a bank to say that it will not divulge the details of such fraudsters and scammers because there happens to be bank-customer relationship which is fiduciary in nature," Mishra said in his order.

Mishra said fraudsters, who are part of illegal activities not only need to be penalised in accordance with law but their "fraudulent dealings must also be thrown split wide open in the daylight" to make others careful.

The Reserve Bank of India counsel submitted before CIC that during inspections, if RBI finds that some bank is not functioning in accordance with its guidelines and norms, then it exercises two options -- in cases of "extreme gravity" penalises the bank and in matters of "some concerns but not grave enough" it may issue an advisory to the bank.

Mishra opined that instead of protecting fraudsters under the Bank-Customer contract, each and every bank must proactively divulge details such as account number, account holder's name, PAN/TAN Cards used, address used etc in order to warn other entities not to be duped and uphold the principles of transparency, rule of law and the guidelines set out by the RBI itself.

ICICI Bank had earlier challenged the orders of the CIC to the RBI in this regard before the Bombay High Court which sent the matter back to transparency panel with directions that ICICI Bank should also be heard.