Wednesday, November 16, 2011

"Inspection reports of co-operative banks should be made public by RBI" : CIC's Landmark Ruling

In a precedent setting judgement, the Chief Information Commissioner asked for the audit and inspection report of a cooperative bank to be disclosed under the RTI Act, rejecting the central banks contention that the disclosure would lead to loss of faith in some banks and adversely affect economic interests of the state. In order to safeguard the interests of depositors and ensure a strong banking system, the Reserve Bank of India (RBI) is required to conduct an inspection of banks at periodic intervals under Section 35 of the B R Act, 1949. Such inspections directly affect the consumer, as it is his or her money that is being handled or mishandled by the banks. Co-operative Banks, which fall under dual regulation of RBI and state government, are no exceptions under such inspection, ruled the Chief Information Commission (CIC) , in respect of an RTI application, concerning Baroda-based Makarpura Industrial Estate Cooperative Bank Ltd, by a city resident Jayantilal N Mistry, with the Urban Banks Department of the apex bank.

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