Political parties asked to designate PIOs and Appellate Authorities within 6 weeks

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:

  • Political parties are registered with the Election Commission of India (ECI) under Section 29A of the Representation of People Act, 1951
  • For the purposes of elections, an association/body gets the status of a political party only on its registration with the ECI under Section 29A.
  • Para 16A of the Election Symbols (Reservation & Allotment) Order, 1968, empowers the ECI to suspend or withdraw the recognition of a political party if it refuses to follow the lawful directions and instructions of the Commission or if it refuses to observe the provisions of the Model Code of Conduct.
  • As per the Supreme Court judgment in Common Cause V/s Union of India (AIR 1996 SC-3081), the ECI is empowered under Article 324 of the Constitution to require the political parties to submit details of expenditure incurred by them in connection with elections
  • The ECI has directed the political parties to submit their accounts within 90 days after general elections in case of Lok Sabha and within 75 days in the case of Assembly elections
  • Under Section 29C of the RP Act, a political party is required to report to the ECI in respect of contributions received by it in excess of Rs20,000 from any person or company
  • The contributions made to the political parties are exempt from the Income Tax, both for the donor and the donee.
  • Recognition of political parties is governed by the provisions of Election Symbols (Reservation and Allotment), 1968, which is an order issued by the ECI under Article 324 of the Constitution read with Rules 5 & 10 of the Conduct of Election Rules, 1961, to provide for specification, reservation & allotment of symbols and recognition of political parties and matters related thereto.)


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
said clause.”

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.

Prashant Bhushan:

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”.)




4 years ago

100% needed. And also that exemption rule of Rs 20000 should be immediately removed. It encourages black money and cash transactions in elections. This whole system of elections and politicians is completely outdated now. Its time for direct democracy and govt work to be done by recruited people, not people's representatives. No need of elections / politicians. Recruit people in Govt jobs and let people decide what policies should be made. There should be no need of elections and politicians. People will manage all the work. Will create employment too. People working for people, thats what democracy should be, not politicians ruling over people and deciding on their behalf. 50% of people's time is wasted on these 2 topics - politics and elections. This 50% time should actually be spent on governance and people making policies and implementing them as well.


Dayananda Kamath k

In Reply to Dekho 4 years ago

it is the people who have voted and supported these parties. in democracy you receive a govt you deserve. if you vote a party because they are providing free colour tv, tablets, mobile phone, laptop, rice at rs.1 when actual price is rs.40/ you will get such parties only. they have mismanaged the economy for 60 years and you support them again because they are giving you something free.the money comes from your own taxes or borrowings by the govt.unless you debar parties from declaring freebies in their manifesto countries position will not improve. election commission should debar all political parties which have announced freebies and implemented for 10 years from election immediately. even supreme court should initiate suomoto action as it is nothing but corrupting the voters.

Dr Paresh Vaidya

4 years ago

This is a great opportunity for the political system to get cleaned. But the arguments by Shri Prashant Bhushan are tenuous. Only because a party can remove an MLA from membership or because they can not deal in cash more than RS 20,000 do not make the public body. Allotment of Election symbol by Election commssion also is not a good argument because even a shop is allotted a registration number by the municipal body. Parties are also not constitutional bodies because the Indian constitution does NOT mention any entity like a political party !

This apart, they can decide to cleanse themselves.


4 years ago

My dear Vinita,
Please keep following up this story as the political parties will resist this democratic effort to force open their activities through RTI.
Peace and love - Joe.

Dayananda Kamath k

4 years ago

rahul gandhi used to enumerate laws brought in by congress as a show piece to ganer votes and show that congress govt is functiuoning. one main question is why they were forced to bring these special laws. these rights are already enshrine in our constitution and any govt should have ensured these rights without special laws. since they failed they are bringing these laws. even in case of rti. the purpose of the act is that citizens should know what is happening with the govt and how it is working. since govt is not transparent people have to fight to get this right.but it is being followed in letter than the main purpose of the law itself is defeated of improving governance.

Shashikant Koppikar

4 years ago

Opposition by the political parties is an indication of how far removed they are from the mood of the nation, how low they are on moral fibre and how right Anna Hazare and Aravind Kejariwal are.

Mrs Kokila Mani

4 years ago

One major party divides people in terms of religion, caste and creed to get votes with all scams etc.

another major party wants to divide states into smaller states to rule the country in the name of efficient administration but God knows how can they manage large country if they come into power

the regional parties what they can do without central support is not explained only to get votes they play with emotions and sentiments of the people

left parties look to communist countries outside. all the leaders are born with silver spoon in the mouth



4 years ago

Should the Public limited companies come under RTI? Can a public limited company disclose all documents/ details to the non- share holding general public?


4 years ago

We need not be too excited as all the political parties are united in defeating the applicability of RTI to them. So there is a long battle ahead for the citizens of India.

Veeresh Malik

4 years ago

The political formations are likely to come together and close ranks in their attempts to escape adhering to the RTI Act. We need to make sure that this does not happen, and one way to do it is to give this decision as much publicity as we can, and spread the word.



In Reply to Veeresh Malik 4 years ago

RTI cannot be applied in toto with regard to political parties. How can they disclose all documents to general public? But they need to disclose their funding etc.,to the public.

RTI act needs to be fine-tuned.


4 years ago

Can a non- Hindu seek information from Kerala's Devaswom Boards (Hindu Temple boards) to disclose information regarding temple revenue etc.,etc.? (Many non- Hindu worship places are still private bodies and hence do not come under RTI)

I think certain aspects of RTI needs to be revisited.

Customer service in banking is not negotiable, asserts Dr Chakrabarty

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.



Vaibhav Dhoka

4 years ago

The fact is banker himself doesn't know the schemes he is selling.But he has full information about deposit he holds and targets GULLIBLE customer because the string is attached to service condition(for promotion)Therefore this is not selling it is dumping third party product in customers throat.


4 years ago

The Bank customers have become a ‘PUNCHING BAG’ not only for the banks but even for the Regulator RBI

I am sorry for the above blunt statement , but it becomes real when in the OPEN HOUSE an authority no less than the DY. Governor of Reserve Bank of India ( RBI) says that there can not be any effective redressal from the regulator to the legitimate grievance of a Bank customer as for as the ‘Service charges’ charged by the banks for various services are concerned. He had even declared that the issue of service charge in not “Negotiable”. This makes the Consumer as the “Punching Bag” vulnerable to exploitation and victimization.
This is, to say the least, open example of abdication of duty and non-deliverance by the authority who is accountable to regulate and protect the Interest of banking service ‘Customers’ who are consumers and entitled to protection from ‘Unreasonable, exploitative and unfair charges’ under the law of the land. Let us analyse his argument rationally that ‘Because Banking to day is not a service, but a Business/ commercial activity’, the protection to users on charges is not ‘Negotiable’. This interpretation is wholly misplaced. In fact RBI itself defines that ‘The current account’ transactions are in the category of “Commercial” but small and SB account operation is a part of ‘Service’. On this reckoning itself SB account holders can not come under’ Commercial service’ .Further this analogy can be applied to all other sectors too viz; Insurance , Telecom, Reality , commodity selling etc. But then Government has framed the Regulations for Redressal of Consumer Grievances, appointed the Statutory Regulators to protect the interests of the consumers even for such commercial services.
As a part of its ‘Financial Services’, RBI under the policy framed in 2006-07, a working group was especially constituted to frame a code for ‘Fair Practices’ to be adopted by the banks for various banking services . These recommendations were accepted by the RBI and another statutory body to effectively implement and monitor this fair practices code was constituted named as “Banking Codes and Standards Board of India ( BCSBI) . Although the RBI did not frame any “Time Bound” grievance redressal system , the power to monitor the ‘Reasonableness’ of any service charge’ levied by the bank was vested in it. Lately for some unknown reasons , the Power to monitor Reasonableness of any service charge was delegated to the ‘Indian Banks Association’(IBA). Now imagine the plight of the consumer . Every bank has the liberty to levy any amount of service charge for any service’ rendered or even not rendered’ to the customer . There is no transparency in applying this charge on the criteria of service-vs. the cost to the bank. It is pure and simple ‘Business’ of money making’ from the hapless customers. If someone had the courage to ‘Protest’ against any such service-or non-service charge , the consumer has to first spend his own ‘Airtime’ or paper/postage/transporting expenses to lodge such complaint . RBI has not even asked all banks for a ‘Mandatory and TOLL FREE, consumer help-line’. Needless to mention that the concerned bank will maintain that the charge is reasonable . Then to decide whether it is indeed ‘Reasonable or not’ you approach the IBA. IBA is not ‘duty bound or time bound ‘ to even acknowledge such ‘Appeals and Requests’. And when it replies, it is invariably in favour of ‘Holding Fair’ what the concerned bank has done . And that is ‘The End’ for the consumer ,unless he/she has enormous, patience resources and undying will to approach the HC in a writ petition on any trifle issue to make the RBI ACT or go to the Consumer For a to claim compensation for deficiency in service ,which will take years . So in reality this is what the Dy. Governor of RBI had meant.
In this scenario, therefore, the poor Indian banking Consumer will remain a ‘Punching Bag’ to go on receiving blows of financial losses , mental torture, and harassment for any transaction ,even expressly for the mistake or ‘Non-deliverance ‘ of the banks due to either human error or IT failure. In an well analysed article on wrongful “TDS’ deduction and refusing to credit back the same by the wrongdoer banks, shri GURUPUR in another issue of ‘Moneylife’ had asked for some ‘Penalties’ to be levied on the defaulter banks. But in this bleak and anti consumer stance taken by the Regulator, the demand will only remain on paper as a Day Dream. As long as RBI does not change its stance to become “Consumer Centric , from the present ‘Bank Centric’; deliverance in the ‘Financial Services sector’ will continue to remain a grim reality .
To end my comments, I would like to quote what Mr. Rajiv Takru , Secretary ,Financial Services ,Ministry of Finance Govt. of India had stated a couple of days back for prevailing stance of RBI.
“ You must understand , no institution is an island . RBI is not an Island . We must understand that it is extremely important to have some apex body which sits down and deliberates.” But when the RBI authority declares ‘Bank Service charges are non negotiable, no deliberation is possible.

Now the ball is in the court of Consumer Activists, NGOs and Forums either to fight for the “Restoration of Rights of the Consumers” or remain as silent spectators
--Mohan Siroya
Consumer Activist and Chairperson of Consumer Complaints Cell.


4 years ago

When will good governance become non-negotiable i.e. mandatory in India ? All talk and no action when it comes to governance. Thats the story of India in past 65 yrs. Everything has advanced except the same old governance system. Governance systems around the world need to be re-written. They are completely out of touch of current times.


4 years ago

Typical Babu talk. Asking people to fend themselves but RBI taking no action.
Especially with Mr. Chakravarti, who is fond of talking, I do not know why Moneylife should give him one more opportunity.


4 years ago

Madam Dalal - Customer service meetings (periodicity depends on staff strength - monthly/ quarterly) is only for statestical purpose. I have been branch head/ controllers of a largest bank, some points, including some phony complaints are written in the minutes books, signatures taken in the minutes from customers who are always willing to oblige the branch and report sent to controllers. Controllers get a pat on the back as his all branches have conducted the meetings and he writes the issue in his annual appraisal.

D A Bhatt

4 years ago

My opinion and perception is as under. This is good inference of which direction our country is heading. This is just like you break traffic rules and say that say that there is no accident.

Gopalakrishnan T V

4 years ago

The Customer service is not negotiable agreed.Customers have their own rights and duties are also okay. But not giving any service, ignoring him out rightly by giving some excuses or silly answers, misguiding him at the counters, trapping him with all types of mutual fund and insurance products,not intimating the customers about the due dates for renewal of FDs, sending the customers away from the premises without opening the accounts in the name of KYC compliance etc have not been touched upon by the DY Governor satisfactorily. The customers have to virtually fight in the premises that too by educated customers leave alone the illiterate and ignorant ones to get some transactions done is the actual state of affairs in branch premises particularly in PSBs. When some one approaches the banks including SBI for certain forms like account opening form, the reply is that the forms can be down loaded from the Computer. This has happened on the day with SBI that too in Bangalore City when the DG is having the meet in Mumbai on Customer Service. The ground realities can be understood only when one experiences the bitter truth. KYC means know your Contact before you enter the branch premises is what is the reality or else Kill your customers if they come without contacts is what is in practice.

Dayananda Kamath k

4 years ago

in one of the nationalized bank, which has won excellence in use of technology awards from rbi, their software allowed to value date cash transaction to back date. and only one leg of the transfer entry also canbe value dated to back date. when this was pointed out one of the genral managers classic remark was don't dig out new problems as we already have lot of problems in the soft ware. if this is the attitude of bank managements what you can expect. and today he is heading one of the other nationalized bank. and the further classic remark of the head of the audit division is you are the only one reporting problems in the software non other auditor is reporting these things, as if it is my fault to report my findings. even today the banks credit entry to the loan account can be changed to principal or to interest and any change can make your account npa and charge you overdue interest. and many of the operating staff do not know the significance of the issue. they had a problem in mobile recharge through atm where your talk time will be recharged. but amount debited will be credited back to your own account instead of service providers account.i have to right remind and follow up to make rbi understand the implications. after some nasty letters rbi banglore did an audit and found that there exists a problem but no steps were taken to correct it nor rbi took any action on the bank. but i received a show cause notice from the bank.

Ramesh Iyer

4 years ago

Mr. Debashis Basu of MoneyLife has raised pertinent points in this Open House with RBI Dy. Governor Dr. Chakrabarty. All these issues were discussed in recent issues of the MoneyLife magazine as well, and it is commendable how Moneylife intervened or facilitated resolution for aggrieved customers of the BFSI sector. However, in the Crosshair section of the Moneyife magazine Ms. Sucheta Dalal had also discussed how Dr. Chakrabarty, despite being responsible for the Customer Services portfolio at RBI knew all the solutions, but chose to remain aloof, of didn't press for changing systems and processes. Hence, I wonder how this 2 hour Open House would make any difference to the plight of Banking customers. The RBI Dy Governor's past responses have indeed made me cynical.


Suiketu Shah

In Reply to Ramesh Iyer 4 years ago

Agree with yr commments.This reflects poorly on RBI Dy Governor and great on ml who is achieving so so much inspite of so much opposition.It makes ml efforts much more meaningful when the circumstances to fight this is so difficult.


4 years ago


nagesh kini

4 years ago

Tedious on interest from Fixed Deposits with banks is a sore point that is hurting the senior citizens. I've had to meet go along with a 86 year old customer of BOB to get them to reverse at times 100% deducted before they "forgot to deduct earlier, even though the depositor held a duly acknowledged Form 15H. This old man was banking only with BOB for 46 long years.
That the RBI is more concerned in concerned with serving the big industialists and doesn't care for small aam janata is evident from the reduction from the additional 1% to 0.50% and now 0.25% granted to senior citizens.

nagesh kini

4 years ago

Tedious on interest from Fixed Deposits with banks is a sore point that is hurting the senior citizens. I've had to meet go along with a 86 year old customer of BOB to get them to reverse at times 100% deducted before they "forgot to deduct earlier, even though the depositor held a duly acknowledged Form 15H. This old man was banking only with BOB for 46 long years.
That the RBI is more concerned in concerned with serving the big industialists and doesn't care for small aam janata is evident from the reduction from the additional 1% to 0.50% and now 0.25% granted to senior citizens.

nagesh kini

4 years ago

Tedious on interest from Fixed Deposits with banks is a sore point that is hurting the senior citizens. I've had to meet go along with a 86 year old customer of BOB to get them to reverse at times 100% deducted before they "forgot to deduct earlier, even though the depositor held a duly acknowledged Form 15H. This old man was banking only with BOB for 46 long years.
That the RBI is more concerned in concerned with serving the big industialists and doesn't care for small aam janata is evident from the reduction from the additional 1% to 0.50% and now 0.25% granted to senior citizens.

Shadi Katyal

4 years ago

It is nice to hear that customer service is being recognized as one of the rights of the customer but in which banks. Most of nationalized banks don't care and rudeness is unbelievable.Is it due to their union power and inability of Management to take any action.
Let us hope this new leaf is good for the people.

Not possible to give bank licenses to all eligible seekers: RBI

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.


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