The Reserve Bank of India has directed all banks to disclose information regarding their clients' business activities in those cases "where there is a duty to the public to disclose". The RBI directive, issued on Februray 11, lists four "exceptions" where bankers will not be constrained by the secrecy law in divulging information about their clients. The exceptions are:
where the disclosure is made with the express intention of implied consent of the customer.Senior bankers, contacted by The Fiancial Express, said the RBI has reiterated its old stand. "We have been following these norms for quite sometime," said chairman of a Mumbai-based nationalised bank.
Thecentral bank examined the issue (of government and other agencies' requests for information on business houses) in the background of the bankers' obligation to maintain secrecy in respect of customers' transactions.
The scope of the banking secrecy law in India has generally followed the common law principles based on implied contract where the bankers' obligation to maintain secrecy arises out of the contractual relationship between the banker and customer, and as such, no inmformaton should be divulged to third parties except under circumstances which are well-defined, the RBI directive said.
The Reserve Bank directive said the banks should satisfy themselves that the information being sought is not of such a nature as will violate the provisions of law relating to secrecy in banking transaction.
Copyright(c)1998 Indian Express Newspapers (Bombay) Ltd.
