RBI responds to DRI: We can’t ask banks to share customer information
The RBI has said it has no power to ask banks to share information on customers with third parties, including investigative agencies of the government, even if it is in the interests of the bank.
The banking regulator’s response followed a request by the Directorate of Revenue Intelligence (DRI), which sought RBI’s assistance 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.
- The RBI said the decision to share information lies with the banks, which would be responsible for their actions in case of any dispute.
- While two private banks, ICICI Bank and Axis Bank, have shared all information with DRI on the case citing national interest, government-owned SBI and BoB have declined to do so.
- SBI and BoB refused to share the details citing the confidentiality clause. The DRI has been asking the regulator and the banks to share information since 2016.
- In May 2016, the then Revenue Secretary, Hasmukh Adhia wrote to the chairpersons of SBI and BoB asking the banks to co-operate with the DRI investigation.
- At that time, then SBI chairperson Arundhati Bhattacharya declined to share the documents from the Singapore branch.
A never ending issue
The DRI escalated the matter of non-cooperation by public sector banks to the Prime Minister’s Office (PMO), which issued an office memorandum to the secretary of the Department of Financial Services (DFS).
On September 23, 2016, the DFS informed PMO that it has asked the RBI to look into the issue.
Since then, the DRI has written to the RBI multiple times – the last communication was in September 2018. In its reply on May 24, the RBI has asked DRI to explore diplomatic or legal channels to get the information from the banks.
Interestingly, the DRI probe into the alleged overvaluation of coal imports began in December 2014, under the then revenue secretary Shaktikanta Das, who is now the Governor of RBI. However, the agency’s probe has not progressed since 2014 due to non-cooperation of the banks.
The DRI 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”.