Author: Nishendu Kochhar, Maharishi Markandeshwar Deemed to be University

Reserve Bank of India v. Jayantilal N. Mistry (2016) is a landmark case in India, for transparency jurisprudence under the Right to Information Act, 2005 (RTI Act). Through this judgment, the Supreme Court clarified the limits to which information held by the Reserve Bank of India (RBI) can be shared with the public, particularly on banks, inspection reports, and defaulters.

The case resolved the tension between the institutions' obligations to confidentiality and the public's right to know, under the RTI Act, that can be disclosed by banks. RBI had consistently argued against disclosure of inspection reports, relying on its fiduciary relationship with banks, confidentiality, and harm to national interests. The Supreme Court rejected this position completely, stressing that the RBI, as a regulator, is mandated to act with transparency and cannot protect the interests of private banks or defaulters on the basis of disclosure.

This judgment is significant because it broadened the scope of accountability, as this related directly to the financial sector, enhancing the RTI regime, while confirming that the public interest in transparency outweighs private commercial rights to confidentiality in the regulatory context.

Respondent Jayantilal N. Mistry applied under the RTI Act, for information about the RBI's inspection reports of banks, and lists of bank defaulters.

RBI refused to provide the information requested citing Section 8 (1)(a) (national economic interests), and Section 8 (1)(e) (fiduciary relationship) exemptions from oversight under the RTI Act.

The Central Information Commission (CIC) ordered the RBI to disclose the requested information based on the public interest exception.

RBI appealed the CIC orders to multiple High Courts , claiming that the disclosure prejudiced public confidence in banks and would create panic in the economy.

The matters were then transferred to the Supreme Court, resulting in Reserve Bank of India v. Jayantilal N. Mistry.

Can RBI refuse to provide the information in question under Section 8(1)(a) and 8(1)(e) of the RTI Act on the basis of fiduciary obligation or economic interest of the state?

Can inspection reports, defaulter lists and correspondence, fall into the exemptions to disclosure under the RTI Act?

To what extent can the public’s right to information overrule the confidentiality of banking services?

The Supreme Court in a detailed judgment on 16 December 2015 held as follows:

1. On Fiduciary Relationship Section 8(1)(e): The Court held that RBI is not in a fiduciary relationship with banks. It is a regulator and supervisor and not an agent holding information “in trust” for banks.

As such, RBI cannot hide behind the fiduciary exemption to refuse to share the information.

2. On Economic Interest Section 8(1)(a): The Court rejected RBI’s argument that the disclosure would be detrimental to public confidence, and ultimately the economy.

It stated that transparency can only foster public confidence; secrecy nurtures corruption and inefficiency.

3. On Public Interest: The Court stated that inspection reports, findings of violations, and lists of defaulters must be disclosed as the public has a right to know about how regulators and banks operate in respect of banking services.

This is especially applicable to ordinary citizens because it has a direct relationship with the economy and their financial well-being.

4. On the Role of RBI: The Court chastised the RBI for taking a protective position towards the banks instead of protecting the interest of the public.

It stated that RBI has a statutory obligation to be transparent and cannot hide behind any clause of confidentiality.

Therefore, the Supreme Court ordered the information to be disclosed under RTI, and the principle was emphasized that regulatory agencies are accountable to the public and not the institutions that they regulate.

The RBI v. Jayantilal N. Mistry judgement marks a robust pro-transparency position by the Supreme Court:

RTI Act Strengthened: The judgement reiterated that exceptions under Section 8 should not be read broadly, and the general position is to disclose information unless there is compelling evidence of direct harm to national security or public interest.

Bank Oversight: By holding RBI accountable to the public rather than the banks, the Court ensured greater scrutiny of regulatory failures, financial misconduct, and systemic non-repayment.

Importance of Public Interest: The judgement recognised that confidentiality agreements may not override statutory requirements for transparency, especially where public money and economic stability are concerned.

Critique and Practical Concerns: Some critics have argued that disclosure may violate the relationship of trust between banks and RBI, or inhibit banks from reporting problems candidly. However, the Court prioritised citizens' right to know over institutional relationships.

As a result, the case broadened the obligations of financial disclosure in India, established a precedent for a liberal construction of the RTI Act, and provided an important framework for holding regulators to account.

• IndianKanoon, Reserve Bank Of India vs Jayantilal N. Mistry on 16 December, 2015, https://indiankanoon.org/doc/86904342/

• Akash Krishnan, Reserve Bank of India v. Jayantilal N. Mistry (2021) : case analysis, iPleaders  https://blog.ipleaders.in/reserve-bank-india-v-jayantilal-n-mistry-case-analysis/