Section 34A of BRA : Section 34A: Production Of Documents Of Confidential Nature

Explanation using Example

Imagine a scenario where a banking company is involved in a legal dispute with one of its employees over an industrial matter, and the case is being heard under the Industrial Disputes Act, 1947. During the proceedings, the employee's legal team requests the court to compel the bank to produce certain documents that may include sensitive financial information.

The bank, however, asserts that the requested documents contain confidential information about its reserve funds and provisions for bad debts that are not disclosed in its published balance-sheet. Invoking Section 34A of the Banking Regulation Act, 1949, the bank claims that revealing this information would compromise its confidential financial data.

As a result, the authority overseeing the proceedings decides not to compel the bank to produce these documents or disclose the confidential information. If there is a question about whether any of the confidential reserves or provisions should be considered in the case, the authority has the option to refer the matter to the Reserve Bank of India for a final decision. The Reserve Bank would then issue a certificate indicating whether and to what extent such reserves and provisions may be taken into account, based on sound banking principles and all relevant circumstances.