Behind The Scene

They Call it Democracy

Amitava Chowdhury

Although people have some idea about the purposes of the government departments or nationalised companies, they know little about how these are managed and what their responsibilities are. Even informed people, not to speak of God-fearing ordinary people who are generally aware, have limited knowledge or scope to know about these institutions. Well, people have come to know suddenly about the move to privatise Air India because of its huge debt and discussions have started on the privatisation of the railways as well. But the fact is, this debt or loss has not piled up in a day. Why it was not discussed and why the common people, did not come to know about it? After all, under the democratic system in India, the people are the owners of the state or nationalised sectors, at least on paper.

In truth, the chain of events started in February 2015, when advertisements were published in the newspapers inviting applications for the posts of MDs and CEOs of some Nationalised Banks. This was unprecedented. Nothing of the sort had ever happened since Bank Nationalisation. So why was it done now? Since the Supreme Court had admitted the case but did not issue any stay order, the Finance Ministry issued a notification on 14 August 2015 and completed the process of MDs and CEOs recruitment in several Nationalised Banks. Mr P S Jayakumar, MD & CEO of VBHC Value Homes Pvt Ltd, got the top position of Bank of Baroda and Mr Rakesh Sharma, MD & CEO of Lakshmi Vilas Bank Ltd, a private bank, was placed at the helm of Canara Bank.

On 4 September 2015, this writer filed an application under the Right to Information Act, questioning whether the advertisements were issued according to the Bank Nationalisation Act: if so, under which sections of the Act and if not, who had issued this illegal order, etc. The application also sought, to know some details about the recruitment of top officials in 2014-2015. When reply was not received within the time stipulated by the law, a complaint with the Information Commission in under section 18(1) of the Act was lodged. Since the decision of not to reply was not of any individual but of the Department as a whole, hence the appeal was not forwarded to the department concerned under section 19(1) of the Act. The complaint was sent to the Central Information Commission and a copy to the department concerned by Speed Post. After some days, a reply of the application dated within the stipulated time period came from the department by Speed Post. The India Post website showed that the letter dated 15.10.2015 had been posted on 13.11.2015 and delivered on 19.11.2015. So, the reply was posted after the complaint was made. The dates did not match. Anyway, the reply was far from satisfactory. It said that the first four queries could not be answered as those did not pertain to 'information' according to the Right to Information Act and there were restrictions in the Act on providing the information sought by the next four questions. So, the whole thing was outside the law. After a few hearings, the case was adjourned.

Another important fact in this regard that in addition to the above mentioned application few more applications were filed under the Right to Information Act on the appointments of Managing Directors & CEOs and also Executive Directors of the Nationalised Banks. Responding to one of these applications, the department concerned had provided copies of the appointment letters of Mr P S Jayakumar and Mr Rakesh Sharma. Again, in 2017, in another application it was asked about the essential qualification for being the MD & CEO of a Nationalised Bank. The reply given by the Union finance ministry clearly shows from the appointment letters provided by the Finance Ministry that the two incumbents did not fulfil the essential qualifications required. In other words, two persons had been allowed to hold illegally the top posts in Canara Bank and Bank of Baroda for more than two years from August 2015 to till date. The main worry is not only the illegal appointments, but another piece of information which has been gathered from the banks’ own websites. That is, the amount of non-performing assets (NPA) or bad loans increased by Rs 25,369 crore in Bank of Baroda and by Rs 21,258 crore in Canara Bank during the 15 months between September 2015 and December 2016 (five financial quarters). That means, the total increase of NPA in the two banks amounted to nearly Rs 47,000 crore. Besides these two news has come in about irregular appointment in five other banks. A direction from the Information Commission or Supreme Court is required to probe whether it is true or not. In the case of the two banks mentioned earlier, irregularity in the appointments has been found by the finance ministry itself. Together with the other five, the total NPA of seven banks could exceed Rs 1,30,000 crore.

The enormity of this amount can be guessed form the following facts:
1.   The projected cost of building the east-west corridor of Kolkata Metro Railway extending from Garia via Salt Lake Sector V and from the Kolkata Airport to Howrah Maidan through a tunnel under the Ganga, along with 12 stations, is Rs 5,000 crore.
2.   The 'Sea Link' bridge from Bandra to Worli in Mumbai, completed in 2010, which is about 6 km long and has eight lanes, took Rs 1,600 crore to be built.
3.   Air India is being privatised because it has accumulated a debt of Rs 6,500 crore.
If one compares, these figures with that of the NPA or loans which the banks consider irrecoverable, one may judge how big the latter amount is.

An aaplication was also filed under the Right to Information Act asking for some details about the Appointment Committee of the Cabinet (ACC), which is the ultimate authority of the appointments to the top posts of Public Sector Undertakings (PSUs). In reply, the secretariat of the ACC, department of pernonnel and training, informed that earlier, it used to have three members— the Prime Minister, Home minister and the Cabinet Minister (MIC) of the department concerned. With the departmental minister being excluded, at present it has only two members—the Prime Minister and Home minister. So, if there is any irregularity, the responsibility should lie on these two persons. Now it is up to the readers to determine under whose instructions such irregularities or illegalities had taken place. Concerned people are definitely troubled by these developments.

Vol. 50, No.43, Apr 29 - May 05, 2018