Cape Town - Tito Mboweni, the governor of the Reserve Bank, on Friday indicated he could seek exemption from the Promotion of Access to Information Act to prevent the public from gaining access to confidential information about banks.

But he insisted this would be in the best interests of the banking sector as a whole.

Briefing parliament's two finance committees, he defended the decision not to release two confidential reports on Saambou Bank, which some people believed could have shed light on its collapse last year.

He admitted the central bank had been caught napping by not applying for exemption from the act when it was passed.

"We slept through the process when this was being put in place and we should have asked for an exemption," he said.

As it was, the act now overrode all the provisions of the Reserve Bank Act and any member of the public could ask for access to confidential information.

He said the main concern had been that the reports on Saambou by the registrar of banks and consulting firm KPMG were highly technical and could easily be misunderstood, to the detriment of the whole banking sector.

The registrar of banks could gain from banks access to any information it needed, much of which would be highly confidential, to assess whether they were properly run and what corrective measures were needed.

"Banking is a very, very sensitive part of doing a business," Mboweni said. "Information that is just willy-nilly thrown out into the public domain, which might not even be understood, might easily destroy a bank because people do not understand the detail of what is going on."

The KPMG report did not deal with the reasons behind Saambou's collapse but rather with three incentive schemes set up by Saambou and their effect on it.

On the "often trumpeted allegations" that some depositors had been put at a disadvantage by the failure to disclose all this information, he said that while all deposits had initially been frozen in February last year, depositors had been allowed to withdraw portions of their funds before being given full access to their funds in September.

With acknowledgements to Lynda Loxton and the Business Report.