In matters of confidentiality, Banking is risky due to the highly sensitive nature of information which is often exchanged, recorded and retained. The purpose of this article is to discuss the clash of confidentiality and disclosure in the banking sector across the globe.
The Black’s Law Dictionary defines confidentiality as secrecy or the state of having the dissemination of certain information restricted. Breach of confidentiality, then, refers, to the violation of this trust that has been placed in another in a fiduciary relationship, in this case bank and their customers.
Breach of confidence is already seen as an independent tort in the United Kingdom, whereas in India there has been a gradual increase in recognizing breach of confidentiality
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As a general rule, the agent’s duty of confidentiality is a facet to the principal’s protection against unwarranted attempts by outsiders to enquire into his affairs. However, certain situations demand the interest of the state being given greater importance than an agent’s duty of confidentiality.
This was reiterated by Diplock LJ in Parry Jones v. Law Society ,
“Such a duty of confidence is subject to, and overridden by, the duty to the party to that contract to comply with the law of the land. If it is the duty of such a party to disclose in defined circumstances confidential information, then he must do so, and any express contract to the contrary would be illegal and void.”
The leading case which defined the scope of bank’s duty of secrecy is Tournier v. National Provincial and Union Bank of England.
Bankes LJ stated that the duty of secrecy is not all-embracing and is subject to certain exceptions:
• Where disclosure is under compulsion of
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It further recommended a statutory codification of the principle which was later rejected by the Government.
However, this view on confidentiality has inspired the formulation of Banking Codes and Ethics around the world.
The Banking Code in the UK, in an attempt to bolster the duty confidence, in its paragraph 11.1 states,
“We will treat all your personal information as private and confidential (even when you are no longer a customer). We will not reveal your name and address or details about your account to anyone, including other companies in our group, other than in the following four exceptional cases when we are allowed to this by law.”
With information being stored in computer databases which are prone to hacking, the issue of confidentiality has become more important.
The Data Protection Act 1998 gives effect to European Council Directive 95/46 on the protection of individuals with regards to the processing and free movement of such