What is problematic with this report?

While I am not competent to comment on the banking and financial issues discussed in this report, I find the committee's attitude towards the Right to Information Act, 2005 (RTI Act) very disturbing. The report blames the RTI Act as one of the several external constraints on the governance of public sector banks (Section 2.7, page 33 of the report). The committee has found that coverage under the RTI Act inhibits the PSBs’ ability to compete with their counterparts in the private sector as the latter are not covered by the same law.

So the committee recommends that the external constraints be addressed first by the finance ministry before addressing the internal weaknesses that affect the competitiveness of PSBs (recommendation 2.2 on page 34).

What do publicly available facts indicate?

Only 20 of the 26 nationalised banks have submitted their RTI returns to the central information commission (CIC) through their parent ministry – the ministry of finance, for 2011-12. Statistics for 2012-13 are not available as the CIC has not yet published its latest annual report.

The available data indicates that, on an average, the maximum number of RTI applications per branch received by a PSB during this period is an 'astronomically high' 2.25 applications for Allahabad Bank followed by the Bank of Baroda at an average of two RTI applications per branch. Several banks have received an average of less than one application per branch during this period. Of course this is only a statistical picture because some branches including the head office would have received many more applications than the average. Nevertheless, the point that I am illustrating here is that work-wise there is simply no logic to the committee's claim that banks are burdened by RTI applications.

The RTI burden in those branches receiving more applications than others could be reduced by appointing more public information officers. Surely bankers know this solution better than their customers.

Further, the highest percentage of rejection of RTI applications in the same year was 52.9 percent by State Bank of Hyderabad followed by 41.5 percent by Vijaya Bank. Corporation Bank alone had not rejected a single RTI application and the lowest rejection rate was 6.4 percent for UCO Bank. Most other PSBs had rejected between 13-50 percent of the RTI applications.

With such low average figures for receipt of RTI applications and such high rejections rates, it is not clear how the RTI Act can be treated as a constraint on the governance of public sector banks. The committee has simply failed to explain its point.

Information about non-performing assets:

The committee starts its report by stating that the financial position of PSBs is fragile and that capital is significantly eroded with the proportion of stressed assets rising rapidly. The obvious reference here is to bad loans that these banks have given out in the past.

When I filed two rounds of requests for information about NPAs of ten PSBs, almost every bank rejected the request on grounds of commercial confidence, fiduciary relationship (that much abused exemption) and/or personal privacy and two banks are yet to revert. So these banks are not willing to reveal to citizens, who deposit their hard earned money with them, as to who has defaulted on loans. Yet the committee goes ahead and reports that the RTI Act is a constraint on the governance of PSBs.

What we as citizens need to debate and oppose is this trend of blaming everything bad on the RTI Act. No bank secrets have been disclosed under the RTI Act till date. This shows the strength of the legitimate exemptions under the RTI Act which the committee fails to recognise.

We as civil society actors must challenge banks to show how RTI has adversely affected their performance in objective terms. Until then such criticism of the RTI Act must be treated as merely a case of overflowing of the bile due to an unhealthy lifestyle. We could however wish them in Munnabhai style: "Get well soon".