Times
of India: Mumbai: Thursday, 25 December 2014.
The Corporate
Debt Restructuring (CDR) cell of the Reserve Bank of India has refused to
answer queries under the Right to Information (RTI) on the grounds that it is
not a public authority. RTI activist and former Central Information
Commissioner Shailesh Gandhi, who sought information on the cell, has accused
the body of acting like a khap panchayat, evading public scrutiny and acting
like a law unto itself.
"How can
a body which uses public money to restructure private debt not fall under the
purview of the RTI?" asks Gandhi. The CDR website shows that 505 cases of corporate
debt restructuring have been approved till date, totaling around Rs 3.7 lakh
crore. "If such a body is not held accountable, it will have serious
implications on India's economy," said Gandhi. CDR members listed on its
website include 21 public sector banks, 5 associated banks of the State Bank of
India, 11 financial institutions and only 14 private sector banks.
Gandhi's RTI
query and first appeal were rejected by CDR. He has now filed a second appeal.
The reply to
his RTI query said, "CDR cell is neither established nor constituted by or
under the constitution or any other law made either by parliament or by state
legislature and it is also not made by notification issued or order made by the
appropriate government (sic)," further stating that CDR was a
'self-empowered body.'
However
Gandhi, argues that, under section 2(h)(d) (i) of RTI, the words 'public
authority' include any body or institution owned, controlled or substantially
financed by the government, directly or indirectly by funds provided by the
appropriate government.
Gandhi argues
in his appeals that the CDR cell is controlled by the government as five of
seven members of its core group "are public servants and get their
salaries from the government." He goes on to argue that "13 out of 19
employees (of the CDR) are also government servants who get their salaries from
the government."
"The
core group members and other employees certainly would be representing the
government. Any other assumption would be an unfair slur on their integrity.
The core group members are there because of their positions as government
servants and hence exercise control on behalf of the government. To claim that
the appropriate government does not control the CDR cell would be to negate the
truth," adds Gandhi.
When
contacted by TOI, RBI did not comment on the matter.
In a reply to
Gandhi's first appeal, CDR said, "..the core committee members or the
employees do not determine the character or nature of the control excercised by
the appropriate government. The control of the government in the management or
the functioning of the body is more relevant than the number of public servants
working in the CDR cell." The reply further stated that the bank officers
were considered "public servants" only for limited purpose.
In his second
appeal, Gandhi quotes an RBI circular which shows that the initial finances for
the CDR were provided by IDBI (a public sector bank) and over 75% of subsequent
finance was from public sector banks and institutions. Gandhi argues that the
CDR is both controlled and substantially financed by the government.
"It is
also noteworthy that it does not appear to have any legal structure and despite
being created by an RBI circular, claims a virtual presence not accountable to
anyone. If such an argument is accepted, all government organizations could
create such virtual cells and deny information and accountability," says
Gandhi's appeal.
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