CIC ruling in SBI case to affect subsidiaries' business
NEW DELHI: The Central Information Commission's (
CIC) ruling to bring SBI Cards under the ambit of Right to Information Act could adversely affect business prospects of subsidiaries of state-owned banks, experts feel.
After the
CIC ruling, subsidiaries of state-owned entities, in which the parent company has more than 51 per cent stake, would have to comply to
RTI regulations and provide information to the public, said Diljeet Titus, a senior partner of law firm Titus and Co.
Although the
CIC's ruling is an extension of the established law it will have an implication on the banking sector, he said, adding that in practice it may prompt corporates and individuals to shift accounts to private banks to preserve business confidentiality.
Terming it as an "important and sensitive judgement", Rodney D Ryder, partner of corporate law consultants Fox Mandal Little, said: "While the judgement is welcome there is no effective counter-check to prevent sharing of financial and private data."
The
CIC needs to clarify on privacy issues that would emerge in cases of disclosure of information relating to banking and financial services enterprises, he said.
Ryder also suggested enactment of a "counter balancing legislation" to check misuses that are likely to follow the
CIC decision to expand the ambit of the
RTI Act.
With the order expected to have a far reaching impact on the country's banking sector, an emerging conflict between the
RTI Act and banking secrecy laws is on the anvil, which may lead to more litigation, Titus added.
CIC ruling in SBI case to affect subsidiaries’ business - Banking - Banking/ Finance - News By Industry - News - The Economic Times