The high rejection rate could mean the banks had something to hide and may be a reflection of the government’s current trend of restricting the access to information.
Credit: Wikimedia Commons
A day after the Reserve Bank of India (RBI) submitted a list of the big defaulters – those who owe banks over 500 crore rupees each – before the Supreme Court, with the plea that the names not be made public, an analysis of the data on the disposal of right to information (RTI) applications has revealed that three public sector banks (PSBs), which figure high on the list of those with large non-performing assets (NPAs), rejected the most number of applications.
While the rejection rate of some banks was less than 12%, many banks had a rate as high as 50%, indicating that perhaps they have something to hide, said RTI activist Venkatesh Nayak, programme coordinator at the Commonwealth Human Rights Initiative (CHRI), who examined the annual reports released by the Central Information Commission, which contains RTI application statistics submitted by 24 PSBs under Section 25 of the RTI Act.
“The proportion of rejection of RTI applications was quite high in banks that had reported large volumes of net NPAs in 2014-15. Indian Overseas Bank, Bank of Baroda and Canara Bank, which had reported net NPAs ranging more than 8,000 crore rupees, rejected between a third and half of RTI applications received in 2014-15, indicating a very high proportion of rejection,” said Nayak.
The Supreme Court had earlier this month, expressed serious concern on the rise in bad loans and asked the RBI to submit a list of the big defaulters who owed over 500 crore rupees.
What the data reveals
Talking to The Wire, Nayak said while there was a trend of fewer RTI applications being filed with the banks, his analysis revealed that “in three cases, the banks reported very high rates of rejection and also high NPAs, whereas there were also cases where the rejection rate was high but the level of NPAs was less.”
According to Nayak, another inference that can be made from the analysis is that drop in the number of requests for RTI replies was in tune with what was happening with the government overall. But it is difficult to ascertain the reason behind this trend, he said.
He also said it was important to highlight why the rejection rate was less than 12% for two banks, despite the RTI queries being quite high, while for some others, such as Canara Bank and others that had an equal number of applications, the rate of rejection was over 50%. “What is happening? Obviously, some categories of information that people would be asking in these banks would be similar. Moreover, the RTI applications cannot be so significantly different among various PSBs. So is it a question of greater resistance to disclosure in these banks?” Nayak wondered.
He also noted that the the P. J. Nayak Committee, constituted to examine the governance of the boards of commercial banks some years ago, had in its report in May 2014 observed that coverage of the PSBs under the RTI Act was hampering their ability to compete with their rivals in the private sector. However, he said, no data was produced in support of this finding. Ever since, the CHRI has been examining this claim by evaluating the RTI application status of these banks.
In 2014-15, Nayak said, 24 PSBs dealt with a total of 79,148 RTI applications – 56.4% of the total volume of RTI applications received by the Ministry of Finance during the year.
State Bank of India received the most number of RTI applications, at 24,783.
Overall, during the year, 10 of the 24 PSBs witnessed a significant decline in the number of RTI applications dealt with, whereas in the previous year only six banks had experienced a fall. The biggest decline was at the Bank of Maharashtra (22%), followed by the State Bank of Travancore (19.30%) and the Central Bank of India (17.17%).
Andhra Bank rejected the highest percentage of RTI applications, at 55.1%, followed by Canara Bank, at 49.1%, and Corporation Bank, at 45.8%. On the other hand, United Bank of India had the lowest rejection figure, at 6.2%, followed by Indian Bank, at 12%.
Observing that according to 2014-15 data only the State Bank of India, State Bank of Bikaner & Jaipur and Punjab National Bank averaged more than one RTI application per office, with all other banks averaging less than one RTI application per office, Nayak said the statistics therefore do not support the “constraint theory” suggested by the P. J. Nayak Committee.