As per the observations of the P J Nayak Committee on public sector banks, the Right to Information Act (RTI) is a major constraint which is affecting the governance of these banks, without providing any statistics to support this opinion. Never mind the real fact that they are grossly misgoverned in other ways, going by the statistics revealed in April 2018 by the Finance Ministry that NPAs amount to a whopping Rs.6.9 lakh crore.
The Commonwealth Human Rights Initiative (CHRI) decided to examine the trend of RTI disposals by the 26 PSUs and their regulator, the Reserve Bank of India, as a sequel to the J P Nayak Committee’s observation. States Venkatesh Nayak, RTI research scholar and coordinator of CHRI, “Official RTI statistics do not seem to show evidence of any undue burden on them as the average load factor on each branch of a PSB was less than 2 RTI applications per year. Our findings are based on an analysis of the statistical data that the CIC has published in its 2016-17 Annual Report
released in March 2018.’’
As per the CHRI findings, “only 3 PSBs, namely, State Bank of India (1.39), State Bank of Bikaner and Jaipur (1.25) and Punjab National Bank (1.10) averaged more than 1 RTI application per branch in 2016-17. All other banks averaged less than 1 RTI application per branch.’’ So the RTI statistics submitted by PSBs to the CIC do not prove the “constraint theory” identified by the P J Nayak Committee, states Venkatesh Nayak.
What’s stunning is that 6,625 RTI applications were mysteriously rejected under “others’’ category which does not exist. Ideally, they should have abided by the legally permissible exemptions to disclosure provided under Sections 8, 9 11 and 24 of the RTI Act. While PSBs rejected 6,625 RTI applications under “Others” category, with RBI also rejecting more than half (57%) of the RTI applications it received in 2016-17 under “Others” category, 6,616 RTI applications were rejected under Section 8(1)(j) relating to personal information and the protection available for privacy- the most frequently invoked item of legally permissible exemptions.
The following is the detailed analysis of CHRI regarding the load of RTI applications and disposal trends by Public Sector Banks (PSBs)
Trends in the disposal of RTI applications:
· While the RTI applications received by 26 banks (including RBI) in 2016-17 account for 9% of the total number of RTI applications received by all reporting public authorities of the Government of India, they account for 33% of the rejections. This means, the rate of rejection of RTI applications was much higher as compared to other public authorities under the Government of India. Resistance to transparency seems to have increased during this period, particularly when the banking sector is going through a difficult phase;
· The State Bank of Hyderabad rejected a record 71% or 7 out of every 10 RTI applications received in 2016-17,. Oriental Bank of Commerce rejected every 2nd RTI application (50% rejection rate). Corporation Bank's rejection rate was 47.3% while Andhra Bank rejected 45.9% of the RTI applications received in 2016-17. Both Dena Bank and Canara Bank rejected more than 40% of the RTI applications received during this period. 6 other PSBs rejected more than one third of the RTI applications they received in 2016-17
· Punjab National Bank which has been in the news recently because of the more than USD 1.8 billion- Letters of Undertaking (LoU) fraud allegedly committed in collusion with certain business houses, rejected almost 3 of every 10 RTI applications received in 2016-17.
The questionable manner of rejecting RTI applications by banks:
· Three PSBs, namely, Syndicate Bank (7) and Allahabad Bank and Punjab and Sind Bank (5 each) rejected RTI applications under Section 24 of the RTI Act. Section 24 exempts notified intelligence and security organisations from the ordinary obligations of transparency applicable to other public authorities. None of the PSBs are exempt under Section 24 of the RTI Act, so the bar on disclosure will not apply to them;
· Nine PSBs invoked Section 8(1)(f) of the RTI Act to reject 164 RTI applications in 2016-17. Section 8(1)(f) exempts information that is received in confidence from a foreign Government. An important question that must be asked is how and why PSBs are receiving information from foreign Governments in the course of their routine business. Interestingly, RBI did not employ Section 8(1)(f) to reject any RTI application in 2016-17, nor did any of the remaining 16 PSBs;
· All 25 PSBs and RBI invoked Section 8(1)(e) of the RTI Act to reject between 6 to more than 900 RTI applications. State Bank of India invoked Section 8(1)(e) to reject 902 RTI applications – almost three times more than Syndicate Bank and Canara Bank (both of which rejected more than 380 RTI applications each). State Bank of Mysore (13), Dena Bank (12) and RBI (6) used Section 8(1)(e) the least number of times to reject RTI applications (see Graph 1.27). Section 8(1)(e) of the RTI Act exempts information that is available to a person in his fiduciary relationship. Fiduciary relationships are trust-based relationships such as those between a doctor and a patient, a lawyer and a client, parents and their children, managers of orphanages and the wards living there. In its Master Circular of July 2014, RBI has advised banks that their obligation to maintain secrecy of customer-related information arises out of a contractual relationship with the customer. So what kinds of information are being denied by PSBs by treating them as information available in a “fiduciary relationship” with the banks needs further examination;
· 10 PSBs invoked the Cabinet-related exemption of the RTI Act [Section 8(1)(i)] to reject 223 RTI applications in 2016-17. Interestingly, 2/3rds of these RTI applications were rejected by only 2 PSBs, namely, State Bank of India and Corporation Bank. RBI did not invoke this exemption even once during this period.
Trends in the banks' use of legitimate exemptions:
· Section 8(1)(j) of the RTI Act was the most frequently invoked of legally permissible exemptions in 2016-17. Under this provision the disclosure of personal information of an individual whose privacy must be protected is exempt. State Bank of India invoked this exemption to reject more than 1,100 RTI applications along with 10 other PSBs that rejected more than 200 RTI applications by invoking this exemption. Among the 25 PSBs, Union Bank of India invoked Section 8(1)(j) the least number of times (22). Interestingly, RBI rejected only six RTI applications under this category
· 24 PSBs invoked Section 8(1)(d) more than 4,200 times to reject RTI applications in 2016-17. Section 8(1)(d) of the RTI Act protects information that is in the nature of commercial confidence, trade secrets or intellectual property rights (IPRs) where disclosure will harm the competitive position of a “third party”. In other words, this exemption is not available for a public authority to protect its own information that is in the nature of commercial confidence, trade secrets or IPRs;
· Despite the overall trend of PSBs using Section 8(1)(j) relating to privacy of an individual most often to reject RTI applications, 11 PSBs bucked this trend in 2016-17. 8 PSBs invoked Section 8(1)(d) of the RTI Act more often than Section 8(1)(j) to reject RTI applications in 2016-17. Three PSBs rejected more RTI applications under Section 8(1)(e) i.e., information held in a fiduciary relationship than on grounds of invasion of privacy of an individual protected under Section 8(1)(j) of the RTI Act. Similarly, 11 PSBs invoked the fiduciary exemption under Section 8(1)(e)of the RTI Act more often than Section 8(1)(d) which protects information in the nature of commercial confidence, trade secrets or IPRs in 2016-17;
· 24 banks invoked Section 8(1)(h) of the RTI Act to reject between 1-62 RTI applications during 2016-17 (see Graphs 1.22 and 1.23). Section 8(1)(h) prevents the disclosure of information if it will impede the process of investigation or prosecution or apprehension of any offender;
· 19 banks invoked Section 8(1)(g) to reject between 1-60 RTI applications in 2016-17. State Bank of India invoked it in 60 cases followed by UCO Bank in 47 cases, Bank of India in 34 cases. RBI invoked this exemption to reject 16 RTI applications during this period (see Graphs 1.24 and 1.25). Section 8(1)(g) exempts information whose disclosure may endanger the life or safety of an individual or reveal the identity of an informant or intelligence gatherer;
· RBI invoked Section 8(1)(a) 99 times to reject RTI applications in 2016-17 (see Graph 1.34). Section 8(1)(a) is the omnibus national security exemption clause which covers economic interests of the State within its ambit;
· Canara Bank topped the category of 5 PSBs invoking Section 9 to reject RTI applications in 2016-17 (see Graph 1.17). Section 9 exempts information whose copyright vests in private entities.
The CHRI Report recommends that, “the CIC must urgently launch a third party audit of banks receiving the most number of RTI applications as well as those reporting a very high proportion of rejections in order to make an assessment of the manner in which banks are disposing RTI applications.’’