Ministry of Finance directs RBI to treat J&K Bank as a Govt bank

RTI activists get a shot in the arm to make the bank accountable to public

Ahmed Ali Fayyaz

SRINAGAR, Jun 22: In their struggle to make the state-controlled Jammu and Kashmir Bank Ltd accountable to public, RTI activists have discovered that union Ministry of Finance had directed Reserve Bank of India (RBI) to treat J&K Bank as a government bank as long as the state government retained over 50% of shares in it.

Even before some RTI activists and lawyers approached Jammu and Kashmir State Information Commission (SIC) with the plea that J&K Bank be declared as a government bank---and thus bound by law to provide information under RTI Act 2009 to the common citizens---the country’s highest executive authority in the domain, union Ministry of Finance, had directed RBI to treat J&K Bank as a government-controlled financial institution. The clarification came in the wake of confusion whether the Government of India’s Interest Subvention Scheme (ISS) was applicable in respect of J&K Bank.

“I am directed to say that the Government of India is implementing Interest Subvention Scheme since 2006-07 to ensure that the short term crop loans upto Rs 3.00 Lakh is available to farmers at 7% p.a. This Scheme is applicable for Public Sector Banks, Regional Rural Banks and Cooperative Banks”, Mr M S Azad, Under Secretary (AC) in Department of Financial Services, Ministry of Finance, Government of India wrote to Chief General Manager RPCD, RBI, Mumbai in a “MOST IMMEDIATE” communication on 01-11-2011. Copy of the letter was also sent to Chief General Manager, CPD, NABARD, Head Office Mumbai.

Mr Azad added: “Jammu & Kashmir Bank, being majority shares owned by Government of J&K, is also a public sector bank as per section 617 of the Companies Act. It has therefore been decided that the Interest Subvention Scheme on short term crop loans as mentioned above will also be applicable for the lending done by the Jammu & Kashmir Bank as long as Government of J&K retains majority stake in the bank. RBI and NABARD are requested to take necessary action in this regard”. In order to ensure that the loanee farmers got necessary benefit of the Central scheme, Mr Azad sought acknowledgement of the receipt of his communication to RBI and NABARD. A copy of the letter was delivered on Chairman of J&K Bank Ltd for information and necessary action.

RTI activists pursuing the matter with SIC included Jammu-based lawyer Vilakshana Singh, Nasrullah, Dr Varun Suthra, Immamul Ansarullah, Raman Sharma, Sunal Mahajan, Shalini Gupta, Dineshwar Singh Jamwal and Chuni Lal.

Former Chairman of the bank, Haseeb Drabu, had resisted all efforts of the RTI movement with his contention that J&K Bank was neither a state-created or state-controlled bank nor liable by RTI Act of 2009 to share any information with the common citizens. Even as he was removed and forced to resign by Omar Abdullah’s government in August 2010, his successor Mushtaq Ahmad too adopted the same line. Consequently, the bank authorities returned all the RTI application, while asserting that the bank did not fall under the jurisdiction of the law.

In the wake of all the RTI applications being returned to the applicants blank, some Jammu-based lawyers and RTI activists filed an appeal before SIC, seeking declaration that the J&K Bank, by virtue of being creation of the J&K Government and being fully controlled by the state government that had 53.17% share in it, be declared as a government bank and thus under jurisdiction of RTI Act of 2009.

In its Decision No: 120- SIC-J/K/Comp/35/2010 on 24-04-2012, SIC’s full bench, headed by Chairman Mr Ghulam Rasool Sufi, declared that J&K Bank was a government-created and government-controlled and thus liable to provide information to ordinary citizens under RTI Act of 2009.

Paragraph 59 of the SIC’s landmark judgment read:  “Thus having regard to the above discussion, the Commission declares the J&K Bank (Ltd) to be a “Public Authority” as defined in Section 2 of the J&K RTI Act, 2009 fulfilling the conditions therein”. 

The operative portion of the judgment in Paragraph No: 60 read: “Accordingly having declared the J&K Bank Ltd. to be a “Public Authority” as defined in Section 2 of the State RTI Act, the Chairman /Chief Executive Officer of the Bank is directed to designate First Appellate Authority /Authorities, Public Information Officer/Officers and Assistant Public Information Officers as provided under Section 5 of the RTI Act. His attention is specifically invited to Section 5 of the State RTI Act 2009 which 7 of the State Right to Information Act. The Chairman of the Bank shall also kindly take necessary steps to impart training and sensitize the officers so designated about the various provisions of the State RTI Act, 2009 read with State RTI Rules, 2010. In this connection if the Bank desired any assistance and guidance of this Commission, the Commission may be approached and requested for doing the same. The Chairman being the Public Authority of J&K Bank Ltd is also directed to ensure the implementation of provisions of Section 4 of the Act”.

However, within days, J&K Bank challenged the SIC judgment in J&K High Court. On May 22^nd, Mr Justice J P Singh stayed operation of the SIC’s impugned judgment and directed that Government of Jammu and Kashmir too be impleaded as a party.

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