DBOD.No. BP.BC.12/21.01.023/98

February 11, 1998

       Magha 22, 1919 (Saka)

All Commercial Banks

(excluding Regional Rural Banks)

Dear Sir,

Furnishing of data - violation of secrecy obligations

As the banks are aware, requests for data/information on certain aspects of their business are received from time to time from Government and other agencies for academic/theoretical purposes. This issue was examined in the background of the bankers' obligation to maintain secrecy in respect of customers transactions. The scope of the secrecy law in India has generally followed the common law principles based on implied contract. The bankers' obligation to maintain the secrecy arises out of the contractual relationship between the banker and customer, and as such no information should be divulged to third parties except under circumstances which are well defined. The following exceptions to the said rule are now accepted.

Where disclosure is under compulsion of law

Where there is a duty to the public to disclose

Where interest of bank requires disclosure and

Where the disclosure is made with the express or implied consent of the customer.

The banks should therefore, appreciate the implications of furnishing information that would violate the provisions of secrecy in the background or circumstances stated above.

2. In view of the position clarified above, we advise that whenever such requests are received, the banks should satisfy themselves that the information being sought is not of such a nature as will violate the provisions of the laws relating to secrecy in the banking transactions. In cases in which the banks have doubts whether the furnishing of information might violate secrecy provisions, they should get specific legal advice.

Yours faithfully,

(J.B. Mhatre)

Deputy General Manager