The Reserve Bank of India (RBI), known to be the central banking institution of India, has said that it has no power to ask banks to share information on customers with third parties. The RBI further added the third parties included investigative agencies of the government.
According to the Indian Express, this came after the Directorate of Revenue Intelligence (DRI) requested RBI to assist in obtaining information from two state-owned banks on the alleged Rs 29,000-crore overvaluation of coal imports from Indonesia by Indian companies, including the Adani Group, ADAG, and Essar Group among others. “…it may be stated that there is no statutory provision which enables RBI to decide about the permissibility of sharing of customer information by any bank with third parties, irrespective of whether it is in the interests of the bank or otherwise,” said a letter dated May 24 sent by the RBI to D P Dash, Director General, DRI.
The decision to share information lies with the banks, said the RBI. On the other hand, two private banks, ICICI Bank and Axis Bank, have shared all information with DRI. The two private banks cited national interest while sharing the information. On the other hand, government-owned State Bank of India (SBI) and Bank of Baroda (BoB) have declined to do so citing the confidentiality clause.
DRI has written to RBI multiple times and, on May 24, government-owned State Bank of India (SBI) and Bank of Baroda (BoB) have declined to do so citing the confidentiality clause, reported the Indian Express. Interestingly, the then Revenue Secretary, Hasmukh Adhia, was appointed as chairman of BoB in March, but the bank is yet to share information with the DRI. The DRI began the probe into the imports of Indonesian coal in December 2014. The DRI has alleged that money was being “siphoned” outside the country and the electricity-generating firms were availing of “higher tariff compensation based on artificially inflated cost of the imported coal”, reported the leading daily.
