{"id":30843,"date":"2018-10-27T11:06:52","date_gmt":"2018-10-27T05:36:52","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=30843"},"modified":"2018-10-27T11:06:52","modified_gmt":"2018-10-27T05:36:52","slug":"opacity-in-the-banking-sector","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/opacity-in-the-banking-sector\/","title":{"rendered":"Opacity in the banking sector"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-opinion\/opacity-in-the-banking-sector\/article22938050.ece\"><b>Opacity in the banking sector<\/b><\/a><\/p>\n<p><b>Context:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Nirav Modi case, of bank fraud, has once again brought into focus the deficiencies in procedures and supervisory and regulatory controls in the banking sector.<\/span><\/li>\n<\/ul>\n<p><b>Under the RTI<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">In 2011-12, the Central Information Commission (CIC) considered appeals from applicants concerning bank regulatory functions after they had been denied information, under the Right to Information (RTI) Act, by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) .<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The denial of information was on the ground that disclosure would prejudicially affect the economic interests of the state by causing loss of public faith in some banks.<\/span><\/li>\n<\/ul>\n<p><b>Landmark judgment:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">These decisions by the CIC were considered and upheld by the Supreme Court on the basis of transfer petitions filed by the RBI and NABARD, in its landmark judgment in <\/span><b>Reserve Bank of India v. Jayantilal N. Mistry<\/b><span style=\"font-weight: 400;\"> and 10 other cases.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The court ruled that the regulatory bodies were not in a fiduciary relationship with the banks that had provided the information to them and that by attaching a \u201cfiduciary\u201d label to the statutory duty, they had \u201cintentionally or unintentionally created an in terrorism effect\u201d.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Supreme Court also rejected the ground of information disclosure hurting the economic interest of the country.<\/span><\/li>\n<\/ul>\n<p><b>Stop the opacity<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The CIC has also directed disclosure of information in respect of wilful defaulters and absconders.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"> Overriding the ground of the fiduciary relationship of banks with their customers.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Institutions that take the responsibility of managing public funds have to be answerable to the people.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Transparency in the banking sector<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Legal provisions that prevent disclosure of full details of loans of willful defaulters and absconders need to be suitably modified.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Opacity in the banking sector Context: The Nirav Modi case, of bank fraud, has once again brought into focus the deficiencies in procedures and supervisory and regulatory controls in the banking sector. Under the RTI In 2011-12, the Central Information Commission (CIC) considered appeals from applicants concerning bank regulatory functions after they had been denied&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/opacity-in-the-banking-sector\/\">Continue reading <span class=\"screen-reader-text\">Opacity in the banking sector<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-30843","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704895993},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/30843","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=30843"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/30843\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=30843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=30843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=30843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}