Section 13 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970
- (1)Every corresponding new bank shall observe, except as otherwise required by law, the practices and usages customary among bankers, and, in particular, it shall not divulge any information relating to or to the affairs of its constituents except in circumstances in which it is, in accordance with law or practices and usages customary among bankers, necessary or appropriate for the corresponding new bank to divulge such information.
- (2)Every director, member of a local board or a committee, or auditor, adviser, officer or other employee of a corresponding new bank shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the Third Schedule.
- (3)Every Custodian of a corresponding new bank shall, as soon as possible, make a declaration of fidelity and secrecy in the form set out in the Third Schedule. 1 [(4) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies (Regulation) Act, 2005 (30 of 2005).]
Summary
- The bank must follow standard banking customs and keep information about its customers entirely secret.
- Customer information can only be shared if sharing it is required by law or by customary banking practices.
- Every director, committee member, auditor, adviser, officer, employee, and the Custodian must make a formal declaration of fidelity and secrecy before starting their duties.
- This formal promise of secrecy must be made using the exact form provided in the Third Schedule of the Act.
- The strict secrecy rule does not apply to credit information that is shared legally under the Credit Information Companies (Regulation) Act of 2005.
Practical examples
FAQ
1. Can a bank employee casually discuss my account balance with someone else?
No, the bank is legally required to keep your information secret unless the law forces them to share it.
2. Do bank staff have to sign a confidentiality agreement?
Yes, everyone from the top Custodian down to the regular staff must make a formal declaration of secrecy found in the Third Schedule before they begin their duties.
3. Will this secrecy rule stop the bank from reporting my unpaid loans to a credit agency?
No, the law specifically creates an exception allowing the bank to share credit information under the Credit Information Companies (Regulation) Act of 2005.
Test yourself
Q1.Under Section 13 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, under what circumstances can a new bank divulge information about its customers?
Q2.Under Section 13 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, which specific document must bank employees sign to promise confidentiality?
Q3.Under Section 13 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, which of the following groups of people are excused from making the declaration of fidelity and secrecy?
Q4.Under Section 13 of The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, what exception allows banks to share data with credit bureaus?