A bank can disclose information regarding customer's account to a person(s) under the following circumstances.
(a)Under compulsion of law.
(b)Under banking practices.
(c)For protecting national interest.
(d)For protecting bank’s own interest
(e)Under express or implied consent of the customer Disclosure under compulsion of law:
Banks
disclose
information to various
authorities
who
by virtue
of powers vested
in
them under provisions of
various acts
require
banks
to furnish information about customer’s
account. The information is called under:
(i)Section 4 of Banker's Book Evidence Act, 1891 (ii)Section 94 (3) of Code of Civil Procedure Act, 1908 (iii)Section 45 (B) of Reserve
Bank of India Act, 1934 (iv)Section 26 of Banking Regulation Act, 1949 (v)Section 36 of Gift Tax Act, 1958
(vi)Sections 131, 133 of Income Tax Act, 1961
(vii)Section 29 of Industrial Development Bank of India Act, 1964 (viii)Section 12of Foreign Exchange Management Act, (FEMA) 1999 (ix)Section 12 of the Prevention of Money Laundering Act, 2002
Banks
are
required
to furnish only the called for information (no
additional information
is
to be furnished) on receipt of written request of the person who is vested with the authority to
call for such
information under the said acts. The customer is
kept informed about the disclosure of the information.
Disclosure under banking practices:
In order to ascertain financial position and credit worthiness of the person banks obtain information
from other banks with which they are maintaining accounts. It is an established practice among bankers
and implied consent of the customer is presumed to exist. The opinion is given in strictest confidence
and without responsibility on the part of the bank furnishing such information. Credit information is furnished in coded terms to other banks on IBA format and without signatures.