RBI takes CIC to Bombay high court over foreign donor list
The Reserve Bank of India (RBI) has approached the Bombay high court against a Central Information Commission (CIC) order for the central bank to provide details of foreign donors placed by the ministry of home affairs on the Foreign Contribution (Regulation) Act (FCRA) watchlist.
The RBI is seeking a stay on the order passed by the CIC on June 28, 2018.
In its petition, the RBI said that the CIC has issued a show cause notice and directed it to disclose the information to a Right to Information (RTI) application that had been rejected by the central bank earlier.
The central bank said that it cannot disclose the information because it receives it from the ministry of home affairs as a confidential document. “Respondent No 3 (Ministry of Home Affairs) has always considered information pertaining to the Prior Reference Category (PRC) to be sensitive and confidential, and asked RBI not to disclose the same or any part thereof,” it added.
According to FCRA guidelines, renewal of registration for receiving foreign funds cannot be granted unless the organization uploads its annual returns on the FCRA website.
More than 20,000 NGOs are registered under FCRA.
The genesis of the dispute lies
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in an application filed by an RTI activist, Ajay Gupta, seeking information of these donations and lists from the RBI. Gupta is respondent no 2 in the case.
However, the central bank had refused to give any such information, prompting Gupta to approach the CIC, appealing against the RBI. The CIC then issued a show cause notice to the central bank, asking it to disclose the details.
The RTI had sought an updated list of all foreign sources including donors and donor agencies that have been identified by the ministry of home affairs and placed on its watchlist with the effect that any payment or foreign contribution by the donor and donor agency shall not be credited by the receiving banks into the accounts of beneficiaries/recipients except with the prior permission of the ministry of home affairs.
On June 30, 2017, the home ministry directed 3,768 NGOs across the country to validate their foreign contribution designated accounts with banks, saying failure to so would invite penalty. “The impugned (CIC) order and the show cause notice passed by the Respondent No 1 (CIC) are ex-facie illegal, arbitrary and unsustainable in law,” said the RBI in its plea. “There is no provision in FCRA, 2010 which require RBI to maintain an updated list of such foreign contribution and Respondent No 3 has also not given any instructions to RBI, in an exercise of its powers under FCRA, 2010, to maintain an updated list of such foreign contributors,” the petition argued.
The Reserve Bank of India (RBI) on Thursday relaxed rules for non-banking financial companies (NBFCs) to sell or securitize their loan books, in a bid to ease persistent stress in the sector. NBFCs can now securitize loans of more than five-year maturity after holding those for six months on their books, the RBI said.
Earlier, they had to hold these assets for at least one year, a banker said.
However, the relaxation on the minimum holding period will be allowed when the NBFC retains 20% of the book value of these loans, the RBI said.
India’s NBFCs, loosely known as shadow banks, are facing stress on their balance sheets after a debt crisis hit a large infrastructure funding company in September, triggering panic amongst investors and a cash crunch in the sector. Following the massive volatility in the financial markets, the RBI and the government have taken steps to ring fence the crisis.
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