Scroll.in: National: Tuesday, May 01, 2018.
India’s
public-sector banks are rejecting more right to information applications than
other Central government bodies, shows an analysis of data maintained by the
Central Information Commission. The Commission is the apex body that monitors
the implementation of the Right to Information Act, 2005, which mandates timely
response to citizens’ requests for information from public authorities under
the Central and state governments.
This comes
at a time when banks are dealing with a crisis of bad loans and loan fraud.
The analysis
was done by the Access to Information Programme at the non-profit Commonwealth
Human Rights Initiative in New Delhi. The data shows that 86,683 applications
were filed in 2016-2017 seeking information from the country’s 25 public-sector
banks and the Reserve Bank of India. And that banks denied information in
24,175, or 28%, cases.
While the
applications filed to banks constitute only 9% of all applications filed to
Central government bodies, the applications rejected by banks make up 33% of
all applications rejected by Central authorities.
According to
the Commonwealth Human Rights Initiative, banks rejected a major chunk of the
applications without giving valid reasons for denial of information, which are
permissible under the transparency law.
“Resistance
to transparency in the banks seems to have increased during this period,
particularly when the banking sector is going through a difficult phase,” said
Venkatesh Nayak of the Access to Information Programme.
The
banking crisis
In recent
months, questions have been raised about the functioning of both public and
private banks in India. In February, the Punjab National Bank, the country’s
second-largest public-sector lender, said it had detected fraudulent
transactions worth Rs 11,400 crore involving diamond merchant Nirav Modi at one
of its branches. An investigation into a corporate loan extended by ICICI Bank
that called into question the role of its chief executive officer Chanda
Kochhar, and Axis Bank chief executive officer Shikha Sharma shortening her
tenure amid reports that the Reserve Bank was unhappy with the lender’s
performance added to the crisis in the banking sector.
Then there is
the problem of galloping non-performing assets, or loans where the borrower has
failed to repay the interest and/or the principal amount for at least 90 days.
In December, the gross non-performing assets of Indian banks jumped to Rs 8.9
lakh crore after staying under Rs 1 lakh crore between 2006 and 2011. Public
banks account for Rs 7.8 lakh crore of these bad loans.
The bigger
the proportion of non-performing assets in the total lending of a bank, the
unhealthier its finances. That is because banks are expected to set aside a
share of their profits to offset likely losses from such loans. Several banks
have also been accused of or admitted to underreporting non-performing assets.
RTI and
public-sector banks
The Right to
Information Act is not applicable to private banks. But it requires
public-sector lenders to share information with citizens. Only in special cases
– for instance, when the information could harm the privacy of individuals,
financial and defence secrets, trust-based relationships or privilege of
Parliament can government authorities deny information. These exemptions are
specified in the Act itself. The law also says that except for these
exemptions, no other legal provision can be used to deny information.
However,
transparency activists have pointed out that banks have illegally used the
provisions of other laws such as the RBI Act and the Banking Regulation Act to
deny information to right to information applicants.
High
rejection rates
According to
the analysis, the State Bank of Hyderabad rejected 71% or seven out of every 10
right to information applications it received in 2016-2017. It said this was
the highest rate of rejection reported by any public authority in the country
covered by the 2005 Act. The Oriental Bank of Commerce rejected every second
application (50%) and the Corporation Bank denied information in 47.3% of the cases.
The Punjab National Bank rejected three out of every 10 applications it
received in that period.
Banks that
reported lower rejection rates were the State Bank of Patiala and United Bank
of India with 13.5% each and the Indian Bank with 11.7%.
The Reserve
Bank, which acts as a banking regulator among other things, had the lowest
rejection rate of 2.5%. But this was almost double its figure of 1.3% for
2015-2016. “Perhaps the refusal to open up records relating to the
demonetisation exercise, printing of new currency notes and their circulation
to treasury chests situated across the country have added to these numbers,”
said Venkatesh Nayak.
Including the
Central bank, 13 public-sector banks rejected more applications in 2016-2017
than in 2015-2016, the analysis found. On the other hand, the remaining 13
reported a decrease in rejection rates.
Invalid
reasons
Of the 24,175
applications that were rejected, valid reasons for denial of information
specified in the Right to Information Act were not cited in 28% of the cases.
The Central Information Commission’s data shows that banks simply marked
“others” as the reason for rejecting these applications.
Among the
legally permissible exemptions, the banks used the provision for protecting the
privacy and personal information of individuals in 27.4% of the cases, followed
by the provision for protecting commercial and trade secrets in 17.4% of the
cases. The Reserve Bank cited “others” as its reason for denying information in
more than half of the applications it rejected.
“Despite the
CIC reportedly moving to delete ‘others’ category from the RTI statistics
reporting software, the banks are still using this category for reporting,”
said Nayak. “As to what criteria covers the ‘others’ category, remains. This
needs further research to understand how banks are rejecting these huge number
of applications.”
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