Section 51 of The National Bank for Agriculture and Rural Development Act, 1981
- (1)The National Bank shall not, except as otherwise required by this Act or any other law, divulge any information relating to, or to the affairs of, its constituents except in circumstances in which it is, in accordance with the law or practice and usage customary among bankers, necessary or appropriate for the National Bank to divulge such information.
- (2)Every director, member of a committee, auditor, officer or other employee of the National Bank or of the Reserve Bank, whose services are utilised by the National Bank under the provisions of this Act, shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form set out in the First Schedule to this Act. 1[(3) 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 National Bank is legally bound to keep the information of its customers and constituents secret.
- It cannot share this information unless required by law or if sharing it is a standard, customary practice among bankers.
- Everyone who works for the Bank, including directors, committee members, auditors, and officers, must make a formal promise to maintain this secrecy.
- This promise is called a declaration of fidelity and secrecy, and it must follow a specific form found in the First Schedule of the Act.
- There is a specific exception allowing the Bank to share credit information if it is done under the rules of the Credit Information Companies Act of 2005.
Practical examples
FAQ
1. Can a bank employee casually discuss a client's financial situation with their friends?
No. Employees are bound by a legal obligation of secrecy and have signed a declaration promising not to divulge client affairs.
2. Are there any situations where the National Bank is allowed to share client information?
Yes, the Bank can share information if another law requires it, if it is a customary practice among banks, or if it is sharing credit data under the Credit Information Companies Act.
3. Who exactly has to sign the secrecy declaration?
Every director, member of a committee, auditor, officer, or other employee of the National Bank, as well as Reserve Bank staff working for the National Bank, must sign it before starting their duties.
Test yourself
Q1.Under Section 51 of The National Bank for Agriculture and Rural Development Act, 1981, which document must an auditor sign before beginning their duties at the National Bank?
Q2.Under Section 51 of The National Bank for Agriculture and Rural Development Act, 1981, which of the following is a valid reason for the National Bank to divulge information about a client's affairs?
Q3.Under Section 51 of The National Bank for Agriculture and Rural Development Act, 1981, the secrecy rules do not apply to information disclosed under which specific legislation?
Q4.Under Section 51 of The National Bank for Agriculture and Rural Development Act, 1981, who is exempt from making the declaration of fidelity and secrecy?