Indian Bankers Association shall answer in RTI

It’s sad that public bodies fight to escape from RTI. RK Jain and ShrimatiIta Bose filed RTI applications seeking information from Indian Bank Association (IBA), who refused claiming that IBA was not a public authority. They filed complaints and requested referring matter to a larger bench for declaring IBA as a public authority. RK Jain sought the information from Indian banks Association, Mumbai mostly that could be given under Section 4(1)(b). like copies reflecting Legal status of IBA, list of present office bearers, composition of managing committee of IBA for the first year, that is from when it is formed, address, auditors, MoA, source of funding and details of donations.

V Ramachandran, officer on special duty, Legal & Operations from Indian Banks Association rejected the application by letter dated 7.11.2014 claiming that Indian Banks Association was not a public authority citing CIC order dated 06.8.2008 in appeal no. 2622/ICPB/2008 in which it was held that IBA was not a public authority under RTI Act as it was neither substantially funded by the Government nor under the control of Government.

K Unnikrishnan Deputy Chief Executive of IBA claimed that the Hon’ble Delhi High Court on 19.01.2015 in the case of VirendraYadav V CPIO held that IBA was not public authority. He has also submitted the following points: IBA is an unregistered, voluntary association of Banks or like-minded organizations. It is neither a statutory body nor has it been incorporated under any law. IBA was formed on September 26, 1946 by 22 banks coming together to discuss issues of common interest.

As on 30th September 2016, out of 137 Ordinary Members, only 27 i.e. less than 20% (19.70%) are Public Sector Banks (including Associate Banks of SBI). Of the total 239 banks, public sector members are 27 PSB and 38 RRBS.In 2015-16, 90% of the revised BAS was collected from every member. Accordingly, IBA received Rs. 88213500 from the 196 institutions who were Members then. Of this, the share of Public Sector Banks was 43%. In 2015-16, RRBs were not yet the members of IBA.

IBA referred to CIC decision in Ashok Kumar Gupta vs Indian Banks Association in 2008for asserting that IBA is not a public authority under RTI. Countering this contention Ms Ita Bose has argued that “once ‘not a public authority’ cannot remain as non-public authority for entire life of organization” and due to various factors, a private entity could become a public authority later. RK Jain contended that IBA cannot relyon the CIC’s decision in Ashok Kumar Gupta, as it is per incuriamas much as it had been passed in ignorance of the provisions of law along with the judicial pronouncements and the factual matrix of the case.

The Single Bench of CIC in a note dated 14-5-2008 had recorded that “I still feel IBA cannot claim that it is not a public authority. In other words, IBA should also be responsible to the citizen for giving information under RTI Act.” However, later changed its mind in ignorance of the provisions of law and judicial pronouncement, hence it is is incorrect and illegal and liable to be set aside”. He also contended that a reasoned order of the CIC has persuasive value, though it could not be considered as ‘precedent’ in strict terms.

Exercising the independent discretion, a Commissioner can differ with earlier decision of the CIC, if there are sufficient reasons to differ with. This is because the Commission is a quasi-judicial tribunal without any hierarchy or appellate powers within. The Constitutional Courts held that no review power is vested in the Commission. The Commission can decide the disputed question between the parties and that shall be final be binding as per Section 19(7).

The respondent IBA has heavily depended on the Delhi High Court order in VirendraYadav v CIC WP(C) 495/2015 saying that IBA was held not to be a public authority. Applicant sought information from Department of Financial Services, which suggested appellant to approach IBA. Justice Rajiv Shakdar’s order did not declare IBA as no public authority.

The complainants contended that this decision was not on merits because: the IBA was not a party before the High Court, the RTI was not addressed to IBA, the issue whether IBA was public authority was not pleaded before the High Court, the order does not mention anywhere section 2(h) of RTI Act, etc.

As the Managing Committee of IBA comprises 29 member banks, of which around 18 banks are public sector banks, it can be reasonably inferred that a body consisting of 18 ‘state’s operates as the ‘state.

Annual report of IBA, and other records explain its critical role in PMJDY, and pay fixation, preparing panels of transporters, negotiating wage settlements for member banks, entering Bipartite wage settlements, which are registered under Rule 58 of Industrial Disputes (Central) Rules, 1957 having a statutory force. During days of demonetisation IBA circulated the news regarding the reduction of the exchange limit of currency notes from banks from Rs. 4,500 to Rs. 2,000 etc.

Control
The complainants presented various factors that establish the control of state over the IBA: “The PSBs and PSICs are under the control of Ministry of Finance. So is the Indian Bank Association (IBA). The Government of India treats the IBA at par with the PSBs & PSICs. Admittedly, the Government assists and lends its name to IBA. It is also amenable to writ jurisdiction of High Court under Article 226 of the Constitution of India”. Contents of the letter D O No. 10/30/7/2010-IR dated 25/07/2010 addressed to the then Chairman, IBA Sh. Alok K Mishraare sufficient to establish that IBA is under the control of Ministry of Finance.

As on 01-06-2015 Committee of the IBA comprises 31 members out of which 19 members are Chairmen-cum-Managing Directors of public sector banks or public authorities under RTI Act. Thus 61.29% of members of managing committee are public servants or belong to public authorities under RTI Act.

It is well admitted that 43% of expenses of IBA are shouldered by the PSBs. The burden of 43% of expenses are recovered from 19.7% members i.e., PSBs. This amount excludes the contribution made by the Cooperative banks, foreign banks and private banks. Thus, 43 percent of Basic Annual Subscription, which is higher than any other individual division, is contributed by public sector banks. Entire share of Cooperative Banks cannot be considered as the share of private banks.

Depending on the context and finances each cooperative bank needs to be examined to determine its status as public or private authority. Some of them could be public authorities. If their share 12 per cent is removed from the total, hypothetically, the public sector banks share would be 43 out of 88, which is ‘substantial’.The fact that even the foreign and private banks including cooperative banks are custodians of public funds, and letter and spirit of RTI demands them to be accountable. They cannot interpret statistics to escape accountability.

In terms of Annual Report of IBA for the year 2004-05, IBA has 20 Local Chapters functioning at different cities were housed in the buildings of PSBs and manned by public servants whose salary & perks were paid from public funds. No rent is paid by the IBA.Since PSB/PA control 73% of working funds of all banks, hence inflow of funds to IBA from PSB/PA would be near about 70% of total inflow. The 43% public sector resource, tax concessions, publicity funding, accommodation in twenty cities without rent makes the IBA totally dependent upon the Government and public sector banks for survival and functioning. The CIC order in the case of Ashok Kumar Gupta Vs IBA 2008, cannot be used as a shield to keep the IBA out of the RTI fold.Hence, the IBA is expected to function in a transparent manner and should be accountable to the public.

(Based on IC(SA) order in RK Jain vs. Indian Banks Association, Ita Bose vs Indian Banks Association, Complaint No.CIC/MP/C/2015/000044, Complaint No.CIC/SH/C/2016/000123 decided on 20.10.2017. Bench of IC (SA) and IC(MP) declared
IBA as public authority)