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Another ‘private’ body comes under RTI Act

The Madras High Court has upheld that the New Tiruppur Area Development Corporation Limited is a public authority and will have to provide information under the RTI Act. The is in tune with the High Court order passed against the NSE

In yet another case of the judiciary cracking the whip on ‘private’ bodies, the Madras High Court has ruled that the New Tiruppur Area Development Corporation Limited (NTADCL) is a public authority in terms of the Right to Information (RTI) Act as it undertakes projects on a public-private partnership (PPP) basis.

Moneylife had earlier reported on the Delhi High Court decision on the National Stock Exchange (NSE)—(see here), which has brought the bourse under the ambit of the RTI Act.

In a case filed by Manthan Adhyayan Kendra (MAK), an entity involved in research on water and energy issues, the Madras High Court on 6 April 2010 ruled that NTADCL is a public authority and will have to provide the information requested under the RTI Act.

NTADCL, under concession from the Tamil Nadu government and the Tiruppur Municipality (TM), operates the Tiruppur Project. The Tamil Nadu government had privatised the water supply to Tiruppur Industrial Estate, TM and a number of neighbouring villages under the Tiruppur Project. This is one of the largest privatised water supply projects in India.

MAK had requested some information from NTADCL under the RTI Act, which it had refused stating that it is not a “public authority.”

Following this, MAK had moved the Madras High Court with the contention that NTADCL is a public authority and should provide information under the RTI Act.

The court upheld that the water supply company was a public authority for two reasons—one, that this PPP project has support from the government including funds and guarantees, so it has to be open to the RTI Act. Second, that NTADCL was delivering a public service—water and sewerage—and therefore has to be accountable under the Act. A press release on MAK’s website stated that it is likely that NTADCL will go in for further appeal.

However, if the Supreme Court upholds the Madras High Court decision, it would be a significant ruling, given that a number of private players are developing PPP projects across sectors in India. The ruling may open up more PPP project-based private companies to public scrutiny.

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Fresh RBI guidelines on new banking licences by July

The central bank will come out with a discussion paper on new norms for granting banking licences to private sector companies and non-banking financial companies by July

The Reserve Bank of India on Tuesday said that it will come out with a discussion paper on new norms for granting banking licences to private sector companies and non-banking financial companies (NBFCs) by July end, reports PTI.

The discussion on new banking licences will be posted on the website of the central bank for public comments, RBI governor D Subbarao said while unveiling the monetary policy for 2010-11.

"Thereafter, detailed discussions will be held with all stakeholders on the discussion paper and guidelines will be finalised based on the feedback," he said.

All applications received in this regard would be referred to an external expert group for examination and recommendations to the RBI for granting licenses, he added.

Separately, in Parliament today, minister of state for finance Namo Narain Meena said although expressions of interest (EoIs) of some private entities have been received by the RBI, they are to be processed once the guidelines for issuing fresh banking licences to private players are finalised.

The move follows the announcement made by finance minister Pranab Mukherjee in the Budget speech 2010-11 to grant more banking licences.   

"The Indian banking system has emerged unscathed from the crisis. We need to ensure that the banking system grows in size and sophistication to meet the needs of a modern economy. Besides, there is a need to extend the geographic coverage of banks and improve access to banking services,” Mr Mukherjee had said.

The RBI was considering giving some additional banking licences to private sector players. NBFCs could also be considered, if they meet RBI's eligibility criteria, the minister had said.
 

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