The Delhi High Court rapped the RBI on Friday for its "callous", "careless" and "negligent" attitude in not filing a response, from February till date, to a PIL seeking to stop banks from sharing the PAN and financial transaction data of clients with credit rating agencies without the customers' formal consent.
A bench of Chief Justice D.N. Patel and Justice C. Hari Shankar directed the deputy governor of the Reserve Bank of India (RBI) to be personally present before it on October 11, the next date of hearing, if no response and "vakalatnama" were filed on the bank's behalf by then.
The court was displeased that since the issuance of notice in the matter on February 9, the RBI had neither filed an affidavit nor a "vakalatnama" -- a document authorising a lawyer to represent a client -- despite three sets of lawyers appearing for it on three different dates since then.
"The RBI has shown a callous and careless attitude in not filing an affidavit or a vakalatnama, despite issuance of notice on February 9, 2019. It appears that the RBI is negligent in assisting in the matter," the bench said.
It added that it was high time to direct senior RBI officers to present themselves before the court if no affidavit and "vakalatnama" were filed before the next date.
"We, therefore, direct the deputy governor of the RBI to be personally present before us on the next date or file an affidavit and a vakalatnama through an advocate," the bench said.
It also made paisabazaar.com, an online marketplace for financial products, a party to the matter and issued notice to it on the plea moved by Abhijit Mishra, a financial economist, after he claimed that his personal financial data was found on the website.
The court said it was including paisabazaar.com in the matter to find out from where did it get access to the petitioner's financial data, to which Mishra said the website got the information from credit rating agencies -- Transunion CIBIL Ltd and the UK-based Experian PLC.
The petition, filed through advocate Payal Bahl, claims that sharing of a customer's Permanent Account Number (PAN) and other transaction details with credit rating agencies like Transunion CIBIL Ltd affects the person's right to privacy.
According to the petition, banks use the credit reports given by agencies such as CIBIL to decide whether to grant loans, issue credit cards and even to fix the rate of interest to be charged.
Mishra has contended that the Central Board of Direct Taxes (CBDT) has not issued any notification regarding sharing of customers' PAN and other transaction details by banks with any private or non-government entity.
The petition states that even the Income Tax Act, 1961 does not allow sharing of the PAN data of citizens with agencies like CIBIL for the development of a credit score.
The petition has sought directions to "immediately stop the credit institutions (banks) from sharing the details of transactions of customers and borrowers based on PAN".
It has also sought a direction to the RBI to frame a policy to regulate this practice.