In a major victory to democracy, the Central Information Commission on 3rd June has ordered all political parties not only to designate PIOs and AAs within six weeks but also to abide by voluntary disclosures under Section 4 of the RTI Act
It took Right to Information (RTI) activists SubhasChandra Aggarwal and Anil Bahirwal, the national coordinator of National Election Watch and Association for Democratic Reforms, a good three years to collect incriminating evidence and tenaciously follow it up to prove that all political parties are public authorities. This fact was consistently resisted by spokespersons of the big political parties—Congress, Bharatiya Janata Party (BJP), Samajwadi Party (SP), Bahujan Samaj Party BSP as well as Nationalist Congress Party (NCP). The duo’s commendable efforts finally resulted in the Central Information Commission (CIC)delivering a landmark judgment on 3June 2013.
The CIC ruled that political parties should come under the ambit of RTI, taking into account that the Election Commission (EC) is the public authority, which plays a crucial role in bringing any political party into existence and its control over them, subsequently. It also took into account the fact that political parties are substantially funded by the government, thus making them, public authorities under Section 2 (h) (ii).
A full bench comprising Chief Information Commissioner Satyananda Mishra, Information Commissioners ML Sharma and Annapurna Dixit based their judgment on the following grounds:
A delighted Bairwal stated that, “Political parties have long resisted opening themselves to public scrutiny. People have long been demanding that there should be complete transparency in their financial and internal functioning. Various commissions including the Law Commission, Election Commission and NCRCW have already recommended that political parties should demonstrate transparency through various measures. The CIC should be immensely complimented for passing this landmark judgement to enable the citizens of India so that they can access information about the political parties for which they vote for.”
Subhash Aggarwal states that already politicians have begun sending wrong information that now political parties are only answerable to the CIC and not the public. He states, “Some political parties and their leaders have begun creating confusion that the verdict will make political parties accountable to Central Information Commission in addition to the Election Commission. It should be noted that bringing political parties under the RTI Act will make them accountable to members of public filing RTI petitions with them.”
In the earlier CIC hearings of 26 September 2012 and 1 November 2012, the CICs had commented that, “we hold that INC, BJP, CPI(M), NCP and BSP have been substantially financed by the central government under Section 2 (h) (ii) of the RTI Act. The criticality of the role being played by these politicalparties in our democratic set up and the nature of duties performed by them also point towards their public character, bringing them in the ambit of section 2(h).”
The bench on 3rdJune further stated that, “The presidents, general/secretaries of these political parties are hereby directed to designate CPIOs and the Appellate Authorities at their headquarters in six weeks’ time. The CPIOs so appointed will respond to the RTI applications extracted in this order in four weeks’ time. Besides, the residents/general secretaries of the above mentioned political parties are also directed to comply with the provisions of section 4(1) (b) of the RTI Act by way of making voluntary disclosures on the subjects mentioned in the
How it all started:
29 October 2010: Complainant Anil Bairwal, in his RTI application dated 29 October 2010 had sought the following information from the under mentioned political parties:· INC, AICC, BJP, NCP, CPI(M), CPI, BSP—sources of the 10 maximum voluntary contributions received by your party from financial year 2004-05 to financial year 2009-10; modes of these donations (cheque, cash, DD etc); the amounts of these donations; the financial years in which these contributions were made.
15 November 2010: Moti Lal Vora, treasurer, AICC, had informed the complainant that AICC did not come under the purview of the RTI Act; Chandan Bose, PRO, Nationalist Congress Party, in his letter dated 27 November, 2010, explained to Bairwal why this does not come under the RTI Act. KC Bansal of CPI, in his letter dated 6 November, 2010, had informed the complainant of the sources of ten maximum voluntary contributions received by the party for the financial years 2004-05 to 2009-10. Importantly, other political parties chose not to respond to the RTI application.
16 May 2011: SubhashChandra Aggarwal sought the following information from the presidents/secretaries of the Indian National Congress (INC/AICC) and the Bhartiya Janata Party (BJP): Copies of election manifestos of the BJP during its NDA government days; whether all promises made in these election manifestoes were fulfilled; if not to list them; outline of receipts (separately by cash/online/cheque, etc) by the BJP in last two years separately for each year for which updated account information may be there; Outline of payments (separately by cash/online/cheque, etc) made by the BJP in the last three years separately for each year for which updated account information may be there; is it compulsory for every BJP legislature either at Centre or in states or in civic bodies, etc to contribute towards party funds?; If yes, please provide complete and detailed information including also defaulters in making such contributions to party fund in the last three years. Is the BJP aware of any of its legislatures (both at Centre and in the states)/civic body member, etc involved in corrupt and other malpractices in the last three years? If yes, please provide complete details including action taken by party and others against such persons. Has the BJP suggested any proposals to Union government /Election Commissiontowards electoral reforms? If yes, please provide complete details including reply received from concerned ones, if any. Any other related information; file notings on movement of this RTI petition and on all aspects mentioned in this RTI petition.”
20 May 2011: Moti Lal Vora, treasurer, AICC, in his letter dated 20th May, 2011, had informed the complainant that AICC did not come under the purview of the RTI Act. Shri Shanti Prasad Aggarwal, Rashtriya Prabhari of BJP, in his letter dated 28 May2011, had informed the complainant that the BJP was not a public authority and, therefore, the party was not obliged to provide the requisite information.
6 September 2011: Subhash Chandra Aggrawal filed a complaint with the CIC in which he mentioned that the All India Congress Committee and Bhartiya Janata Party, being national parties, had got premium land in Delhi/New Delhi at zonal variant institutional rate which was much less than the prevailing market rate and, therefore, it was not correct on their part to plead that they did not fall under the purview of the RTI Act. It was his contention that both AICC/INC and BJP fell under the ambit of section 2(h) of the RTI Act.
14 March 2011: Anil Bairwal filed a complaint with the CIC against the responses received from INC/AICC, NCP & CPI, contending therein that the political parties, being beneficiaries of the government, fell under the ambit of Section 2(h) of the RTI Act and, therefore, they were mandated to disclose full and complete information to him.
31 July 2012: Chief Information Commissioner in his order dated 31 July, 2012 constituted a full bench comprising Satyananda Mishra, Chief Information Commissioner; Annapurna Dixit, Information Commissioner; and ML Sharma, Information Commissioner
26 September 2012: On behalf of complainant Aggrawal, Prashant Bhushan vehemently contended that the entire political system in India revolved around the political parties. They perform a public function and, therefore, warrant to be declared. The next hearing was on 1 November 2012.
3 June 2013: CIC bench gives order to all political parties to appoint PIOs and AAs in the next six weeks; PIOs to begin functioning within four weeks hence and heads of political parties to ensure that information is suo motu put in public domain under Section 4 of the RTI Act.
Some of the submissions made:
(i) The political parties hold constitutional status and wield constitutional powersunder the Tenth Schedule of the Constitution in as much as they have thepower to -
“a) disqualify legislators from Parliament and State Assemblies;
b) bind legislators in their speeches and voting inside the house;
c) decide what laws are made;
d) decide whether the government remains in power or which governmentshould come to power;
e) decide public policies that affect lives of millions of people.”
(ii) As per Article 102 (2) of the Constitution, a person can be disqualified from being a member of either House of Parliament under the Tenth Schedule and that a similar provision exists for the State Legislators under Article 191(2) of the Constitution. Furthermore, as per Article 102(2), if a member of a House belonging to a political party votes or abstains from voting in the Housecontrary to the directions issued by the political party, he is liable to be disqualified from being a Member of the House.
(iii) The political parties have been given statutory status under Section 29A of theRepresentation of the People Act, 1951.
(iv) Under Section 29A (5) of the Representation of People Act, 1951, politicalparties are required to bear true faith and allegiance to the Constitution of India as by law established.
(v) The political parties give tickets to the candidates and the people vote on party symbols and, thus, the political parties are important instrumentalities of democratic governance.
He also submitted proof of information regarding the allotment of accommodation to various political parties on rental basis and the outstanding dues against them, as received by him from the Directorate of Estates vide their letter dated 24 August 2011.
Anil Bairwal filed a detailed representation before this Commission to contend that political parties fall in the ambit of section 2(h) of the RTI Act. In his representation, Bairwal has made the following salient points:
(i) All the political parties have been claiming tax exemption under section 13Aof the Income Tax Act. As per his representation, various political parties claimedIncome Tax exemption (he provided details)
(ii)The State has been indirectly financing various political parties by way of free air time on All India Radio. He submitted the amount spent by the state on the political parties. He also argued that the State has spent huge amounts on the political parties in the matter of free air time on Doordarshan.
(iii)The central government and the state governments have allotted various houses/buildings/other types of accommodation to various political parties either free of cost or at concessional rates. This also amounts to indirect financing of political parties by the respective governments.
(iv) Political parties are continuously engaged in the performance of public duty and it is, therefore, important that they become accountable to the public. Transparency in the working and financial operations of the political parties is essential in the larger public interest.
He vehemently contended that the entire political system in India revolved around the political parties. They perform a public function and, therefore, warrant to be declared “public authority” under Section 2(h) of the RTI Act. In amplification of his above broad submission, he has advanced the following arguments:
(i) Tenth Schedule to the Constitution vests tremendous powers with the politicalparties in as much as they can oust an elected member—whether MP or MLA—fromout of the party if he steps out of the party line. The vast power of the politicalparties has been recognised in this Schedule and, therefore, if purposive interpretationof the Tenth Schedule is made, then the political parties can be deemed to be coveredunder Section 2(h) of the RTI Act.
(ii) As per Section 29C of the Representation of People Act, 1951, all donationsof and above Rs20,000 made to political parties are required to be reported to theIncome Tax Department. This obligation cast on the political parties points towardstheir public character.
(iii) By virtue of powers conferred on it under Article 324 of the Constitution readwith section 29A of the Representation of People Act, 1951, and Rules 5 and 10 ofthe Conduct of Election Rules, 1961, and other powers vested in it, the ElectionCommission of India made and promulgated the Election Symbols (Reservation andAllotment) Order, 1968. Under this order, Election Commission allots symbols tovarious political parties. The Election Commission is an instrumentality of the State.Allotment of election symbols by the Election Commission to various politicalparties is suggestive of the public character of the political parties.
Bhushan contended that political parties have constitutional and statutory status. It is his contention that incorporation of Articles 102(2) and 191(2) through the 42nd Amendment and the 10th Schedule to the Constitution has given constitutional status to the political parties. According to him, it is a fallacy to say that any individual can form a political party. A body or entity does not become a political party in the legal sense until it is registered by the Election Commission of India under section 29A of the Representation of the People Act, 1951, and this registration lends it the colour of public authority.
Lastly, the complainant has also contended that in exercise of its powers, the Election
Commission of India under Elections Symbols (Reservation and Allotment) Order, 1968,promulgated under article 324 of the Constitution and Rules 5 & 10 of the Conduct of Election
Rules, 1961, grants symbols to various political parties for election purposes for the recognitionof political parties and can suspend or withdraw recognition of recognized political parties ontheir failure to observe the Model Code of Conduct or not following the lawful directions andinstructions of the Commission. It is indicative of the public character of the political parties.
(Vinita Deshmukh is the 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”.)
The focus of the 'Open House with Dr Chakrabarty' organised by Moneylife Foundation was on all aspects of banking services, especially on mis-selling of third party products, grievance redress system and technology glitches in banks
At a Moneylife Foundation programme today attended by a packed audience in Mumbai, the deputy governor of Reserve Bank of India (RBI) Dr KC Chakrabarty said that, "Customer service in banking is not negotiable, but customers must be aware about their rights. If customers depend on regulator for simple things like reading forms in details before signing blankly, then the banking system will not function". He was speaking at an Open House in Mumbai organised by Moneylife Foundation.
"Customer is the most important part of a banking system and it is necessary that the bankers do not ‘squeeze’ customers. However, after saying this, we must understand that banking is not just a service but it is also a business and banks need to levy charges on services in order to survive", Dr Chakrabarty said.
While accepting that mis-selling should not happen in banks, the RBI deputy governor said, “Mis-selling is same across banks and brokers and we need to decide to first identify what is mis-selling. For example, insurance penetration in our country is just 5-6%. However, even the highly educated people fall for ‘higher returns’, rather than the insurance and sign papers blankly”.
Earlier, while welcoming the guests, Debashis Basu, Founder Trustee of Moneylife Foundation and Editor & Publisher of Moneylife, said, “Ideally, banks should stop selling third Party Products: They often do not know what they are selling and do not care what happens to customers who buy them. There is no formal process of learning about a product, or about ethical selling. And they are never accountable for the outcome.” Moneylife Foundation has been arguing that while bankers are supposed to stand for trust; they hold a lot of money on behalf of customers. “Yet, today, bankers are often being referred to as banksters for mis-selling third-party products or for rampant mismanagement of money under the garb of wealth management services. Insurance products, gold at higher than market prices with no buyback, and the worst of all, Wealth Management Products including unregulated products like Art Funds are all sold by banks by exploiting the depositors' trust. Unfortunately, this often inflicts large losses on the hapless bank depositor,” pointed out Mr Basu. Moneylife has narrated several such cases. “As a consumer organisation, all we want is something simple and logical: we want bankers to be made responsible for what they sell,” appealed Mr Basu to the Deputy Governor.
Monelife Foundation placed before the Deputy Governor, a few submissions regarding third party products.
Selling process: If they continue to sell these products, a specific sign off by the customer on all clauses denoting risk factors and disclosure is a must. The BCSBI along with consumer bodies can be asked to work on these in a time bound manner but not more than three months.
Onus on banks: The onus of selling products appropriate to customers must be on the banks. Otherwise, they will keep selling a five-year locked in mutual fund to a 79-year old man. Or sell ULIP to a 60+ retiree, which requires hefty premium payments to be made for a five years before it starts making any returns at all.
Paper trail: Banks must be made responsible to create proof and trail mail/hard copy when relationship managers/tellers accost customers at home or at the banks. A clear email spelling out specific terms and pros and cons must be sent to the consumer.
Compensation: RBI must codify compensation to victims of mis-selling. Since the onus of proving appropriateness of products must be on the bankers, there must be detailed specified penalties when mis-selling is established.
Sale of gold: Indians love to buy gold and trust their bank. This can be a dangerous combination. On every auspicious occasion, such Akshaya Tritiya banks heavily advertise the sale of gold coins. Banks charge a huge premium over the spot price and also different banks charge different prices. Having sold, banks cannot buy back the gold they sell. It is only fair that if banks are allowed to continue sell gold, all these major drawbacks of buying gold from banks must be prominently displayed at the bank, the websites and the ads.
Mr Basu also pointed out that “the RBI has set up an elaborate system of customer services committees. A committee of the board, a standing committee, a branch level committee etc. We would be happy if there was an audit of whether these committees are actually formed, are they meeting, are customers encouraged to share their grievances and so on. If there is a yearly report of the functioning of these committees in the public domain with independent benchmarking, that would actually make the idea useful for customers.”
One of the many issues that Moneylife has taken up with the Reserve Bank of India (RBI) is the need for a technology audit of banks and the systems and processes that they adopt. Over the years, individual banks have often configured systems in a manner that hurt depositors' interest. And, since technology changes are complex and outsourced, the process of incorporating even small, but necessary changes is both cumbersome and expensive.
Recently Moneylife wrote how SBI deducted 40% as TDS (System glitch deducts 40% amount as TDS from SBI depositors’ account! ). What is the reporting and monitoring system for this? HDFC bank was found regularly deducting TDS from the principal (Now, even your fixed deposit principal may be at risk ). Surely, bankers are expected to know that tax is on income and can never be deducted from principal under any circumstances? It is even a violation of the RBI master circular. But the bank kept justifying it to customers with the argument that their systems are geared that way. Who will audit and fix these? Is there an annual audit on the robustness and correctness of bank IT systems?
This is certainly the thought process in the developed countries. From Australia to the US, many countries are now creating a separate agency, whose job will only be to regulate and supervise financial conduct and consumer protection across all financial products. India has started considering this too. Financial Sector Legislative Reforms Commission has suggested creating a consumer protection agency. Meanwhile, by June-end, we are supposed to get a new set of rules from the RBI, on wealth management and sale of third party products.
Applicants have to submit their applications by 1st July for evaluation to get a new bank licence, the RBI said, even as it extended the validity of in-principle licence nod from 12 months to 18 months
Making it tougher for aspirants, the Reserve Bank of India (RBI) today said it will look for very high quality applications to issue new bank permits and may not be possible to issue licences to all eligible applicants.
“There is no predetermined number. RBI will be very selective while considering the applications for new bank licences. It will look for very high quality applications,” the apex bank said in a notification elaborating its response to the queries raised by various stake holders.
“It may, therefore, be not possible to issue licence to all the applicants meeting the eligibility criteria,” it said.
On the timeline for granting in-principle approval for bank licence, RBI said: “It will not be possible to indicate the timeline for grant of in-principle approvals at this stage.”
The RBI, which had on 22nd February issued final guidelines for issuing new banking licences, today came up with clarifications to various queries, as many as 443 from 39 entities, raised by prospective licence seekers.
Applicants have to submit their applications by 1st July for evaluation to get a new bank licence, it said, even as it extended the validity of in-principle licence nod from 12 months to 18 months.
The regulator also said after getting in-principle approval, the licencee has to open the branches within 18 months from the date of in-principle approval.
“After the in-principle approval is accorded by RBI for setting up a bank, the promoters/promoter group have to set up the NOFHC and the bank within 18 months from the date of in-principle approval and the bank has to commence banking business within this period after obtaining the banking licence from RBI...” the notification said.