Right to Information
Guess what is behind PSU banks’ poor performance. It is the RTI Act!
A Committee appointed by the Reserve Bank of India (RBI) has found out that the Right to Information (RTI) Act is one of the factors behind the poor performance of public sector banks (PSBs) compared with private sector banks! The Committee to Review Governance of Boards of Banks in India constituted by the Reserve Bank of India (RBI) Governor on 20 January 2014, in its report, says that RTI Act, is one of the several ‘external factors’ and hurdle to PSBs, as these kind of ‘constraints disadvantages these banks in their ability to compete with their private sector competitors’. Shockingly, this recommendation has been made without providing any data whatsoever as to how RTI has been an impediment.
 
The annual report of the Central Information Commission (CIC) for 2014-2015 shows that over 50% of RTI applications under the category ‘Finance Ministry’ have been made to various PSBs. Understandably, for most of the RTI applicants are those who have suffered deficiency of services by the banks and non-cooperation in providing information to them.
 
Another side that pins a hole in the RBI’s Committee recommendation, a cluster of court cases heard by the apex court. In the Reserve Bank of India vs Jayantilal N Mistry and related cases, the Supreme Court has upheld all the CIC decisions which ordered that information should be provided to the petitioners (RTI applicants).
 
For example, Jayantilal N Mistry sought information from the Central Public Information Officer (CPIO) of RBI about an inspection report on Saraspur Nagrik Sahkari Bank Ltd related to inspection report, but was denied the same by the CPIO. The reason being that the information was received by RBI in a fiduciary capacity and is therefore exempt under Section 8(1)(e) of RTI Act. The CIC directed the petitioner to furnish that information since the RBI expressed their willingness to disclose a summary of substantive part of the inspection report to the respondent. 
 
While disposing of the appeal the CIC observed:
 
“Before parting with this appeal, we would like to record our observations that in a rapidly unfolding economics scenario, there are public institutions, both in the banking and non-banking sector, whose activities have not served public interest. On the 67 Page 68 contrary, some such institutions may have attempted to defraud the public of their moneys kept with such institutions in trust. RBI being the Central Bank is one of the instrumentalities available to the public which as a regulator can inspect such institutions and initiate remedial measures where necessary. It is important that the general public, particularly, the shareholders and the depositors of such institutions are kept aware of RBI’s appraisal of the functioning of such institutions and taken into confidence about the remedial actions initiated in specific cases. This will serve the public interest. The RBI would therefore be well advised to be proactive in disclosing information to the public in general and the information seekers under the RTI Act, in particular. The provisions of Section 10(1) of the RTI Act can therefore be judiciously used when necessary to adhere to this objective.”
 
However, the Committee to Review Governance of Boards of Banks makes the following recommendations, aimed at subverting the RTI Act, but now with the Supreme Court upholding CIC decisions, the following recommendations fall flat:
 
Recommendation 2.2: There are several external constraints imposed upon public sector banks which are inapplicable to their private sector competitors. These constraints encompass dual regulation (by the Finance Ministry, and by the RBI, which goes substantially beyond the discharge of a principal shareholder function); the manner of appointment of directors to boards; the short average tenures of Chairmen and Executive Directors; compensation constraints; external vigilance enforcement; and applicability of the Right to Information Act. Each of these constraints disadvantages these banks in their ability to compete with their private sector competitors. The Government and RBI need to move to rapidly eliminate or significantly reduce these constraints, in the absence of which managements of public sector banks will continue to face an erosion of competitiveness. Further, it is only after these external constraints have been addressed would it be practicable for public sector banks to address a host of internal weaknesses which affect their competitiveness.
 
Recommendation 4.10: It is desirable for the Government to level the playing field for public sector banks in relation to their private sector competitors. Reducing the proposed Bank Investment Company's investment in a bank to less than 50% will free the bank from external vigilance emanating from the Central Vigilance Commission, from the Right to Information Act, and from Government constraints on employee compensation. The trade-off is worth grasping, as more competitive public sector banks will enhance financial returns to the Government with no effective dilution of control.
 
2.7 Easing External Constraints on Public Sector Banks
 
5. Applicability, although in a limited way, of the Right to Information Act. Private sector banks are free of this.
 
 
RTI researcher Venkatesh Nayak analysis the data of RTI applications made to public sector banks as per the 2014-2015 Annual Report of CIC
 
Major Findings
 
  1. The 24 PS Banks dealt with a total of 79,148 RTI applications in 2014-15 (including the backlog from 2013-13). This amounts to 56.4% of the total volume of RTI applications received by the Ministry of Finance in 2014-15 (140,324 RTI applications). The State Bank of India being the largest banking network across the country received the most number of RTI applications - 24,783 i.e, more than 31.3% of the total number of RTI applications received by the 24 PS Banks analysed here. Bank of India with 9,080 RTI applications is in 2nd place followed by Punjab National Bank at 3rd place with 7,779 RTI applications dealt with in 2014-15.
     
  2. In 2014-15, the State Bank of Hyderabad witnessed the largest increase (41.59%) in the number of RTI applications dealt with as compared to the previous year. State Bank of Patiala stood 2nd with an increase of 30.64% in the RTI applications dealt with in 2014-15. Punjab and Sind Bank took the 3rd place with an increase of 25.30% in the number of RTI applications dealt with during the same period.
     
  3. In 2014-15, 10 of the 24 PS Banks witnessed a significant decline in the number of RTI applications dealt with. In 2013-14 when data from 20 PS Banks was analysed by us, only 6 Banks witnessed a declining trend in the number of RTI applications dealt with when compared with the previous reporting year of 2012-13. This appears to be in tune with the overall trend of decline in the number of RTI applications dealt with by public authorities under the Central Government in 2014-15.
     
  4. The biggest decline in the RTI applications as compared to the immediately previous reporting period i.e. over 22% - dealt with during 2014-15 was reported by the Bank of Maharashtra, followed by State Bank of Travancore at 19.30%, with Central Bank of India occupying 3rd place with a decline of 17.17%.
     
  5. Andhra Bank reported rejecting every second RTI application during 2014-15. It had rejected 55.1%, i.e., more than half of the RTI applications dealt with during this period. Canara Bank takes 2nd place with a rejection of 49.1% (almost half) of the RTI applications dealt with in 2014-15. Corporation Bank takes the 3rd place with a rejection of 45.8%. These 3 Banks rejected between 4-5 of every 10 RTI applications they received during 2014-15.
     
  6. The lowest rejection figures are reported by the United Bank of India- 6.2% in 2014-15. The Indian Bank rejected a little less than 12% of the RTI applications during this period. The remaining 22 PS Banks rejected between one fifth to more than one half of the RTI applications during this period.
     
  7. During the period 2014-15, all 24 PS Banks included in this study, opened new offices across the country. Bank of India was the only bank which averaged close to 2 RTI applications per office (1.79). Only the State Bank of India, State Bank of Bikaner & Jaipur and Punjab National bank averaged more than one RTI application per office during this period, with all other Banks averaging less than one RTI application per office. So the RTI statistics submitted by the banks to the CIC do not prove the “constraint theory” regarding their governance which was looked upon approvingly by the P J NayakCommittee in 2014.
     
  8. No positive or negative correlation could be identified between the volume of Net NPAs reported by the 24 PS Banks and the number RTI applications they dealt with during 2014-15. Several Banks with lesser volume of Net NPAs registered a hike of between 8%-40% increase in the number of RTI applications dealt with.
     
  9. However, the proportion of rejection of RTI applications was quite high in Banks that had reported large volumes of Net NPAs in 2014-15. Indian Overseas Bank, Bank of Baroda and Canara Bank which had reported Net NPAs ranging more than Rs8,000 crores, rejected between a third to almost one half of the RTI applications in 2014-15, indicating a very high proportion of rejection of RTI applications. The State Bank of India with the largest volume of Net NPAs amongst the 24 PS Banks included in this study rejected 20% of the RTI applications during this period. State Bank of Mysore and Vijaya Bank are exceptions to this trend as their rejections were very high – between 26%-39% despite the volume of their Net NPAs being less than Rs2,000 crore.
 
 
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet – The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)

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COMMENTS

Suraj Parkash Tuteja

10 months ago

The merger of State Bank of Patiala with SBI is the most satisfying and pleasing news ever because of its utmost lapses and careless handling of complaints, all protecting its employees to the point of stupidity, ny one and all, from junior to the top most excutive.

A written complaint made against a corrupt cashier, Balwinder Singh posted at Saha (Ambala) for indulging in sale of fake Indian currency notes, was covered up, upon asking, simply repy was nothing was found against the employee. Even under repeated RTI Applications, their stock repy has been nothing has been found against the employee. Asked for copies of the statements by the accused employees, each time a reply under the RI was the information cannot be disclosed being personal and confidential.
Even when insisted that the employee is charged with a very serious crime against the security of the country, but o body bothered, and would ot give me a copy of the fake and false statements against my first hand knowledge and information of dealing in fake currencies. Asked whether the complant was forwarded to the Fake Currency Complaints Cell, as stipulated by the RBI, bank does not even confirm or deny whether or not such a cell has been established. Such serious lapses, together with the State Bank of Patiala being the second most defaulting bank in matters to providing information against RTI Applicatios, as confirmed by the
A Committee appointed by the Reserve Bank of India (RBI) has found out that the Right to Information (RTI) Act is one of the factors behind the poor performance of public sector banks (PSBs) compared with private sector banks!

One Assistant Regional Manager posted at Kurukshetra had the knowledge of English not even equivalent to 8th. class student of the Govt schools, because he confirmed he could not understand the RTI quarry. When pulled, he repeatedly state the reply to charges cannot be disclosed as information is confidential and personal.

In fact, the merger of the employees must prclude employees who have been complained against in their present jobs in SBof P because these even one fishes at each station will spoil the otherwise hard working bank employees at each station.

Will the leaders of these Unions, Ashok Malhan, Pawan Thakur, Harvinder Singh, Rajesh Verma, and Ashwani Singla,state on oath that your members in State Bank of Patiala are working honestly and faithfully conducting their futies, what is the use to support such criminals, and lethargic employees, for the criminal workings most are engaged in.
The merger of State Bank of Patiala with SBI is the most satisfying and pleasing news ever because of its utmost lapses and careless handling of complaints, all protecting its employees to the point of stupidity, ny one and all, from junior to the top most excutive.

A written complaint made against a corrupt cashier, Balwinder Singh posted at Saha (Ambala) for indulging in sale of fake Indian currency notes, was covered up, upon asking, simply repy was nothing was found against the employee. Even under repeated RTI Applications, their stock repy has been nothing has been found against the employee. Asked for copies of the statements by the accused employees, each time a reply under the RI was the information cannot be disclosed being personal and confidential.
Even when insisted that the employee is charged with a very serious crime against the security of the country, but o body bothered, and would ot give me a copy of the fake and false statements against my first hand knowledge and information of dealing in fake currencies. Asked whether the complant was forwarded to the Fake Currency Complaints Cell, as stipulated by the RBI, bank does not even confirm or deny whether or not such a cell has been established. Such serious lapses, together with the State Bank of Patiala being the second most defaulting bank in matters to providing information against RTI Applicatios, as confirmed by the
A Committee appointed by the Reserve Bank of India (RBI) has found out that the Right to Information (RTI) Act is one of the factors behind the poor performance of public sector banks (PSBs) compared with private sector banks!

One Assistant Regional Manager posted at Kurukshetra had the knowledge of English not even equivalent to 8th. class student of the Govt schools, because he confirmed he could not understand the RTI quarry. When pulled, he repeatedly state the reply to charges cannot be disclosed as information is confidential and personal.

In fact, the merger of the employees must prclude employees who have been complained against in their present jobs in SBof P because these even one fishes at each station will spoil the otherwise hard working bank employees at each station.

Will the leaders of these Unions, Ashok Malhan, Pawan Thakur, Harvinder Singh, Rajesh Verma, and Ashwani Singla,state on oath that your members in State Bank of Patiala are working honestly and faithfully conducting their futies, what is the use to support such criminals, and lethargic employees, for the criminal workings most are engaged in.

Suraj Parkash Tuteja
9315879780

GLN Prasad

1 year ago

Let us think the other way. Had there been more transparency much earlier immediately after the account showed signs of sickness, this pathetic situation should have never happened. Instead of focusing on inherent reasons and accountability factors right from blaming RBI Governor to RTI Act, every one distracts the Public attention. When they were in Private sector, why they were nationlized, then why they wanted to privatise because holy cow is not yielding the milk.

Bapoo Malcolm

1 year ago

When a person like Mr. Mistry has to go so far for information that he is entitled to get, think of the trauma he has to undergo. The institutions have public money to play around with. The offending staff and their officers must be fined and compensation awarded to Mr. Mistry. Only then will the authorities be made to come to their senses. There are precedents where the staff has been made to pay out of their own pockets. Otherwise the compensation will come out of public funds.

PRAKASH D. BASRUR

1 year ago

It is typical of the behavior of any fraternity , in this case the banking fraternity , trying to help its members ! This is similar to MCI covering for erring medical fraternity or ICA doing similar thing for CA's ! What else can you expect from RBI , the fraternity head ? In all such cases the investigating committee should be a third party group consisting mostly of "non fraternity" professionals like ,say , Ratan Tata , ICAI Chairman , a well known lawyer conversant with banking systems & procedures and , perhaps , computer technologist like Nandan Nilekani who would be familiar with banking software thereby the intricacies of operating level banking. Alas ! we have inherited in toto all our systems , such as our gigantic railways system , PWD , CPWD , govrnment bureaucracy et al , from the British but NOT their impeccable system of impartial investigation in matters such as frauds or mismanagement of Public sector ! I am sure the labour and officer's unions of Public Sector banks would restart their daily post lunch "gate meetings" on this report of the RBI ! Good for their digestion of food !

MG Warrier

1 year ago

Very interesting revelations and analysis. It is time we start moving towards more transparency in the working of organisations dependent on public funds (When I refer to public funds, I have in mind resources belonging to the public including funds/capital mobilised by private sector organisations including corporates and religious/charitable bodies). Perhaps, RTI Act with suitable safeguards should be made applicable to all organisations in government and public/private sectors. We are under the wrong notion that corruption is rampant only in government, inadequacies and inefficiency in management are the monopoly of PSUs and PSBs. It is high time we corrected this attitude and changed our approach to governance, audit and regulation.

REPLY

D S Ranga Rao

In Reply to MG Warrier 1 year ago

Well said. It's the private sector which corrupts the public sector more.

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Nudging the Debate for Gender Equality
Prajnya Trust’s understanding of peace, justice and security, is holistic and its initial work areas reflect this. Swarna Rajagopalan, founder of Prajnya in 2006, recalls that “We chose to work on gender equality issues, including gender violence awareness, and peace education.” They wanted to do something tangible that the general public could relate to.
 
Swarna is a political scientist by training. She points out, “Those who work on gender, do not engage with those who work on security; those who train Panchayat leaders, do not work with ordinary citizens.” To avoid too narrow a focus, in its day-to-day work, “Prajnya was imagined as a space that could, by design, transcend pigeon-holing and offer fluidity between methods and media,” insists Swarna. 
 
So almost everything that Prajnya does is through a loose network of volunteers; they come and go at various stages of their lives and the organisation’s needs and keep its multifarious efforts going. Its blog seeking volunteers says, “We don’t have an office. So it’s not possible to come and help in the office every Thursday morning. We actually don’t have assignable tasks. We are so small we only have responsibilities we are happy to share with or delegate to volunteers. In fact, ALL Prajnya’s core team members are volunteers. We give our time, while earning a living. So the work happens all the time, and yet not all the time.”
 
Swarna is the focal point of its activities along with Shilpa Anand,  partner in Eastern Engineering Company, Dr D Jayashree, an Ayurvedic physician, and Saundarya Rajesh, founder-president of AVTAR Career Creators. It also has a powerful advisory panel. 
 
So how does Prajnya reach out? Dr Rajagopalan tells us, “From the beginning, we have drawn committed volunteers who have given all their spare time to working with us. They have made donations. They have called their friends to give us use of their time and talent. They have trained. They have written. And they have built Prajnya to a point where our work has grown beyond their ability to support it.” 
 
So a full-time salaried team is next on the agenda as well as fund-raising for better logistics, resource persons and hiring space and equipment for conducting programmes. In her appeal to donors, Swarna says, “The kind of work Prajnya does calls for a special kind of donor who can think beyond traditional charity giving or public works, to see knowledge and communication as integral to social change. We need donors who understand that salary and operation costs are critical; without people who are well-supported, nothing can be accomplished. Finding those donors—we believe they exist!—and building a proper full-time team in the coming year is critical.”
 
Its broad spectrum of work includes conducting 16-day awareness campaigns against gender violence, spreading the message through concerts, theatre and satsangs which focus about gender equality. Future plans include setting up of the Prajnya Resource Centre on Women in Politics and Policy which seeks to fill the gap created by scattered and unsystematically compiled information in this field. There are several components of this project: the creation of a database with salient statistics and lists of women in politics and policy-making; a series of oral histories and life-stories of women who have played a pivotal part in politics and society; and a user-generated visual archive of photographs of women participating in the public sphere.
 
People are usually told that “Prajnya is like an Indian wedding. People come and go. Pick up the work in front of you so it gets done—folding clothes, putting away newspapers, whatever.” If you would like to be a part of this attractive effort to spread gender equality, chip in, in whichever way you can. 
 
Or you can simply send a cheque to ‘The Prajnya Trust’ at the address alongside. Donations qualify for deduction under Section 80-G of the Income Tax Act. 
 

 

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COMMENTS

Jyoti Dua

1 year ago

Very useful work is being undertaken by PRAJNYA. Gender violence is a big issue all over the world, including developed countries. It is heartening to know that work is being done on this issue in India too.

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