Reserve Bank of India Act, 1934 | Chapter IIIB

Sections 45-NB and 45-NC: Disclosure of Information and RBI Exemptions

Sections 45-NB and 45-NC of the Reserve Bank of India Act, 1934 form part of Chapter IIIB, which regulates non-banking institutions. Section 45-NB protects information obtained by the Reserve Bank of India (RBI) about non-banking financial companies, subject to express exceptions. Section 45-NC authorises the RBI to exempt specified institutions or classes from provisions of the Chapter by notification in the Official Gazette.

Meaning and statutory scope

Non-banking financial company (NBFC) and non-banking institution are defined in Section 45-I. The RBI's powers to require information and conduct inspections appear, among other provisions, in Section 45-L and Section 45-N. Section 45-NB governs the treatment of information so obtained about an NBFC.

Section 45-NB: Confidentiality of information

Under subsection (1), information relating to an NBFC in statements or returns furnished under Chapter IIIB, or obtained by the RBI through an audit, inspection or otherwise, is treated as confidential. Disclosure is restricted except as permitted by Section 45-NB itself. This is a statutory confidentiality rule, not an unconditional ban on every form of sharing.

When information may be disclosed

Subsection (2) specifies exceptions. An NBFC may disclose information furnished to the RBI with the RBI's prior permission. The RBI may publish information in a consolidated form where it considers publication necessary in the public interest, without identifying an NBFC or its borrowers. Certain disclosures or publications between NBFCs or under customary practice or other applicable law are also recognised, subject to the proviso governing onward publication.

Subsection (3) empowers the RBI, despite other legal provisions, to communicate information on an NBFC's business to an authority constituted under law where the RBI considers this expedient in the public interest, in the interests of depositors or the company, or to prevent conduct detrimental to depositors. This may be done on the RBI's own motion or on request.

Subsection (4) prevents a court, tribunal or other authority from compelling the RBI to produce or permit inspection of statements or other material obtained under Chapter IIIB. Its precise operation must be read alongside the statutory language and applicable judicial interpretation.

Section 45-NC: Power of RBI to exempt

Section 45-NC permits the RBI, where satisfied that exemption is necessary, to declare by notification in the Official Gazette that any or all provisions of Chapter IIIB will not apply to a particular non-banking institution, NBFC or specified class. An exemption may be general or limited to a stated period, and may be subject to conditions, limitations or restrictions. An institution should not assume it is exempt merely because it belongs to a particular business category: the relevant Gazette notification and its terms must be checked.

Practical significance

For NBFCs, these sections affect regulatory reporting confidentiality, disclosure of information to other authorities, and the availability and scope of regulatory exemptions. An RBI exemption under Section 45-NC is not necessarily an exemption from other statutes, and a disclosure authorised by Section 45-NB does not automatically override every separate confidentiality obligation.

Text of Sections 45-NB and 45-NC

Section 45-NB - Disclosure of information

(1) Any information relating to a non-banking financial company,-

(i) contained in any statement or return submitted by such company under the provisions of this Chapter ; or

(ii) obtained through audit or inspection or otherwise by the Bank, shall be treated as confidential and shall not, except otherwise provided in this section, be disclosed.

(2) Nothing in this section shall apply to-

(a) the disclosure by any non-banking financial company, with the previous permission of the Bank, of any information furnished to the Bank under sub-section (1) ;

(b) the publication by the Bank, if it considers necessary in the public interest so to do, of any information collected by it under sub-section (1) in such consolidated form as it may think fit without disclosing the name of any non-banking financial company or its borrowers ;

(c) the disclosure or publication by the non-banking financial company or by the Bank of any such information to any other non-banking financial company or in accordance with the practice and usage customary amongst such companies or as permitted or required under any other law :

Provided that any such information received by a non-banking financial company under this clause shall not be published except in accordance with the practice and usage customary amongst companies or as permitted or required under any other law.

(3) Notwithstanding anything contained in this Act or in any other law for the time being in force, the Bank, if it is satisfied that, in the public interest or in the interest of the depositors or the non-banking financial company or to prevent the affairs of any non-banking financial company being conducted in a manner detrimental to the interest of the depositors, it is expedient so to do, may, either on its own motion or on being requested, furnish or communicate any information relating to the conduct of business by any non-banking financial company to any authority constituted under any law.

(4) Notwithstanding anything contained in any law for the time being in force, no Court or Tribunal or other authority shall compel the Bank to produce or to give inspection of any statement or other material obtained by the Bank under any provisions of this Chapter.

Section 45-NC - Power of Bank to exempt

The Bank, on being satisfied that it is necessary so to do, may declare by notification in the Official Gazette that any or all of the provisions of this Chapter shall not apply to a non-banking institution or a class of non-banking institutions or a non-banking financial company or to any class or non-banking financial companies either generally or for such period as may be specified, subject to such conditions, limitations or restrictions as it may think fit to impose.

Official legislative and regulatory sources

For a specific institution, verify the current RBI notification, its effective date, applicable conditions and subsequent amendments before relying on an exemption.