Appeal Body Tells RBI to Rethink Denial of Demonetisation Information

The RBI must now revisit its blanket refusal to answer an RTI query on demonetisation and provide a proper reply in a fortnight’s time.

New Delhi: In a significant ruling, the executive director and appellate authority of Reserve Bank of India (RBI), Deepali Pant Joshi, directed the chief public information officers (CPIO) of the Department of Currency Management (DCM) and the secretary’s department (SD) to provide an appellant with “supplementary reply” on the issue of demonetisation within a period of 15 days.

Joshi said she did not find “sufficient clarity” in reasons provided by them to deny information citing the exemption clause under section 8(1)(a) of the Right to Information Act.

The order of the appellate authority has come just days after the RBI submitted before the Public Accounts Committee that the power to scrap banknotes lay with the government.

“The conduct of monetary policy by RBI under the RBI Act is different from the action taken by the government for withdrawal of legal tender character of Rs 500 and Rs 1000 banknotes under a different provision of the Act,” the central bank told the committee in a written statement as it examined its governor Urijit Patel on the demonetisation issue.

The central bank also conveyed that the old series of Rs 500 and Rs 1000 notes had been cancelled by the government on receiving the RBI’s recommendation.

In his original application, the appellant Hemant Kumar had sought the “date-wise copies of the decision making process including file notings and/or minutes of meetings of central board of directors of the Reserve Bank of India with respect to its framing of its recommendation as submitted to the central government recently regarding bank notes of denomination of the existing series of the value of Rs 500 and Rs 1000 shall be ceased to be legal tender.”

The CPIO of the DCM had informed the appellant that the information sought relates to sensitive matters pertaining to discontinuation/withdrawal of banknotes and that the information is exempt from disclosure under Section 8(1)(a) of RTI Act. The CPIO of SD had also claimed a similar exemption in this regard.

In the appeals, Kumar had expressed his dissatisfaction on the exemption claimed by the CPIOs. He had contended that it was not clear how the information sought would attract any of the items enumerated in Section 8(1)(a) which provides that there is no obligation to disclose information which “prejudicially affects the economic interests of the state,” Joshi observed in her order.

The appellate authority relied on two major rulings in reaching the decision.

Joshi said that while examining the role of RBI in respect of safeguarding the economic interest of the state, the Central Information Commission had in the case of R.R. Patel vs RBI (which was decided on December 7) observed that, “While exercising its statutory powers, the RBI is required to give utmost importance to the public interest and to the interest of the banking policies. The conducting of the banking and formulation of the banking policy is closely related to the economic interests of the state and the RBI being the central bank of the country is entrusted to safeguard the economic interest of the state. Being an expert body, it is the sole authority to decide as to what would best serve the economic interest of the state.”

Joshi also observed that while the term “economic interest” has not been defined in the RTI Act, the Delhi high court had explained the concept in its decision of April 2, 2013 in the case of Joginder Pal Gulati vs The Officer on Special Duty (ITA II) cum CPIO and another by stating, “There is no definition of the expression ‘economic interest’ in the RTI Act. As is ordinarily understood, the term economic would mean connected with or related to the economy. Economy would general relate to aspects of wealth and resources of the country, its production, consumption and distribution. The term wealth would include, I take it, financial resources of the country. While the term ‘interest’ in the context of the RTI would mean financial state”.

Stating that it was a matter of common knowledge that based on the recommendation of central board of RBI, the central government had through the notification of November 8 declared that the specified bank notes shall cease to be legal tender with effect from November 9, the appellate authority had pulled up the CPIOs for withholding information saying, “However, it is not clear from the reply of the CPIOs as to how the provisions of Section 8(1)(a) would get attracted in the given case.”

Joshi said that while claiming exemptions under the RTI Act it is imperative for the CPIOs to explain with sufficient clarity the reasons that prevailed in their drawing of such a conclusion. She also noted that it was not clear if the CPIOs had considered the possibility of severing part of the information and disclosing the rest. In view of all these aspects, she asked the CPIOs to revisit the application and provide a supplementary reply to the appellant in a fortnight’s time.

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