RTI activist Sharad Phadke who successfully pursued a case of his failed ATM transaction which was not credited to his account for 65 days, has now taken up cudgels against bank frauds against small time loan takers. A report…

Radha Nath Singh, a villager in Dhanbad district of Jharkhand was assured a loan of Rs50,000 from Bank of India, Dhanbad. With the first instalment of Rs25,000, he took a shop on rent and spent on its interiors in order to open an auto spares shop. This loan which he took came under the government’s self-employment scheme. However, instead of providing the remaining Rs25,000 to Mr Singh, the branch manager of the bank directly gave the money to a dealer who would supply the required auto spare parts. However, the dealer did not keep up to his promise of supplies. Besides, Mr Singh alleged that the bank manager had committed a fraud by directly paying a third party without his consent.

This spurred Mr Singh to write an official complaint to the bank as well as the dealer but both were mum on this count. Frustrated, he approached the consumer court which directed the bank to refund Rs85,000 as compensation for harassment along with the return of the loan. The bank wrote to the consumer forum stating that a long period has elapsed for this issue (more than a year) and so it does not merit any compensation. Mr Singh then took up the matter with the National Consumer Redressal Forum demanding justice. Shockingly, the forum directed him to refund Rs20,000 and pardoned the bank for its illegal disbursal of Mr Singh’s part loan to the dealer.

This news which appeared in one of the national newspapers caught RTI activist Sharad Phadke’s keen eye and he decided to follow up on whether the dealer returned the Rs25,000 and how much money was spent by the bank as legal fees and others to cover this fraud.

So, Mr Phadke shot off his RTI application last July to the Assistant Public Information Officer (APIO) of Bank of India, Laxmi Road branch, Pune. The RTI application read as follows:

There appears to be huge wastage of public money for pulling an unemployed youth up to NCDRC, who tried to avail small loan for self employment.  Thus there is larger public interest involved, when the government is propagating inclusive growth. I therefore seek following information:

1. Total amount of expenses with break-up of legal charges paid to advocates, miscellaneous expenses, money equivalent of man hours of staff, travelling and Diem allowances etc. for contesting this case.

2. Names, designations and places of present posting of officers of bank who recommended or authorized such litigation and expenses thereof. Sec. 4 (1) (b) (iii)

3. Certified copy of all process notes and file notings relating to legal action. As per Section 4 (1) (b) (iii) and bank may use section 10 of RTI Act for segregation by blurring personal information, if need be.  

4. Certified copy of policy or board guidelines for such litigation.
[Section 4 (1) (b) (viii)]

5. Certified copy of circulars issued by HO for guidance of administrative offices and branches on litigation in courts, consumer forums/commissions. [Section 4 (1) (b) (v)]

6. Certified copy of process note of appointment of advocates on panel who represented the bank and their opinions held by bank.

7. Details of departmental action initiated by bank on erring branch manager of concerned branch for loss of Rs.27000/- to the bank. In case no action is initiated, I should be made known reasons held on record therefore. Kindly note, as per RTI Act, Section 2 (f) ‘Action not taken on any one is also information.’

8. Name, designation and official address of the disciplinary and controlling authority of the branch manager at the time of disbursement of Rs27,000.  

9. Rationale held on record, justifying such legal action on unemployed youth by a government-owned bank mandated to alleviate unemployment and poverty, at public cost. And when there is no law to support direct payment unless you have authority to pay.

10 Details of action taken on recently declared national litigation policy by
Government of India, Ministry of Law

What happened after he filed the above RTI application?

The APIO forwarded it to the Pune Zonal Office of Bank of India. The zonal office in turn send it back to Mr Phadke instead of forwarding it to PIO, Bank of India, Dhanbad (as RTI Act mandates the PIO to forward the application meant for any other department and not return it to the applicant.)

Mr Phadke filed an appeal to the First Appellant Authority (FAA) in the Pune Zonal office who forwarded it to Dhanbad. The FAA replied to Mr Phadke, but the latter alleged that false information was provided to him. So, Mr Phadke appealed to the Central Information Commissioner (CIC) in Delhi who in turn asked the appellate authority in Pune’s zonal office to investigate into the allegations of Mr Phadke of having been provided false information and provide the requisite information before 30 September 2011.

When no information was provided, Mr Phadke again went in appeal to the CIC for non-compliance. Last week, the Central Information Commissioner (CIC) Shailesh Gandhi has directly ordered the Dhanbad branch to provide information by February 2012. Mr Phadke is miffed that besides information exposing the wasteful public expenditure for needless litigation was not coming by Mr Gandhi’s deputy registrar has given an order directly without thinking it fit to penalize the PIO for false information.

So now, Mr Phadke has registered an official complaint to the Chief Central Information Commissioner in Delhi against CIC Shailesh Gandhi asking what authority a deputy registrar of CIC office has to dispose off the case without hearing conducted by Mr Gandhi.

Knowing Mr Phadke’s tenacity to follow up issues, we could have a breakthrough in the case of banks playing illegally with a poor man’s loan under a government scheme. For earlier story read: http://www.moneylife.in/article/customer-awareness-banks-keeping-banks-on-their-toes/18421.html