New Delhi: A public interest litigation or PIL due to be heard by the Gujarat high court on Monday could force the Union government to explain the norms it followed while naming 37 independent directors across 12 nationalized banks last year.
An article published by the Indian Express on 6 May 2007 had alleged nepotism and irregularity in the appointment of these directors. It had reported that a list of professionals and experts was ignored to make way for individuals with affiliations to the Congress party that heads the ruling United Progressive Alliance (UPA) coalition at the Centre. It said that 33 of these 37 directors had links with the party.
The report led Praful K. Desai, a trustee of an Ahmedabad-based non-profit group, Senior Citizens’ Service Trust, move an application under the Right To Information (RTI) Act seeking a clarification from the Centre on the appointments.
The trust filed a PIL in July after an unsatisfactory response to its RTI application. The PIL seeks directions to the government to divulge the policy it adopted in the appointment of these directors. It also asked the court to instruct the government to furnish a list of these 37 directors with details of their political affiliations and academic qualifications.
The court admitted the PIL in October and issued a notice to the Union government seeking its response.
The petition is of the view that appointments in nationalized banks must be transparent, fair, in the interest of the depositors and “purely on merits and within the framework/norms/guidelines laid down by the Reserve Bank of India and the department of banking”.
Politicians have responded cautiously to the charges.
Mukhtar Abbas Naqvi, vice-president of the main opposition Bharatiya Janata Party, said: “There is nothing wrong in appointing politicians as members of the board of directors as today’s political field has experts from different sectors such as economy and social work.”
He, however, added that it is “wrong” that the appointments in this case have been done only on the basis of “proximity with the leaders of the Congress party or its allies in the UPA”.
Shobha Oza, a Congress leader from Madhya Pradesh who is on the board of state-run Syndicate Bank and whose name figures among the 37 directors, said there was nothing wrong if banks have one or two politicians on a board of 15-16 directors. “The government appoints them because their role is crucial when it comes to the banks’ decision in the social sector,” she said. “The masses need banks’ support to empower the weaker sections. We can influence the board positively when they take decisions in favour of the common men.”
Meanwhile, the Union government’s counsel, Harin P. Raval, said the appointments were done in tune with government norms. Raval said he will present an affidavit before the court on Monday. “We will tell the court that the guidelines have been adhered to by the government in relation to the appointments.”
Liz Mathew contributed to this story.