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Is the National Payments Corporation of India (NPCI) a public authority?
Should the NPCI, which runs the government backed BHIM app, come under the ambit of the RTI?
These are questions that the Central Information Commission (CIC) will be adjudicating on. Information Commissioner Sudhir Bhargava started hearing a petition on Thursday, 1 November, that contends whether the NPCI should come under the RTI as it is a ‘public authority’ as defined by the Right to Information Act, 2005.
Questions about the NPCI’s nature has come up several times since its inception in 2009. The contention arises from the fact that while it is incorporated as a non-profit organisation, its majority shares are held by public sector banks. A majority of its board members are from public sector banks, and its products, like the BHIM app, receives funding and promotion from the government.
The NPCI describes itself as “ an umbrella organisation for operating retail payments and settlement systems in India”. It was set up as “an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India”.
The organisation has been established as a non-profit under Section 25 of the Companies Act (now Section 8 of Companies Act 2013) ‘considering the utility nature of the objects of NPCI,’ the official website cites.
However, petitioner Neeraj Sharma has challenged this characterisation of the organisation. He contends that that the government wields considerable influence over the NPCI by virtue of how it is owned, controlled and funded.
The organisation was promoted by 10 major banks from the public and private sector - State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC. The shareholding pattern was broad-based to include 56 banks in 2016.
Tha applicant in the case, Neeraj Sharma, had filed an RTI query on 10 December, 2016, seeking information pertaining to the Chief Public Information Officer and First Appellate Authority details of NPCI.
Failing to elicit a response, the next step in the RTI process was to file a first appeal under Section 19 of the Right to Information Act, seeking the information of the same.
Sharma’s submission before the Chief Information Commissioner mentions that he was ‘aggrieved by the order of the first appellate authority” and filed a complaint to the Chief Information Commissioner.
On Thursday, Sharma had appeared before the Commissioner along with his brother, Pulkit Verma, who was representing him in the case. On behalf of the NPCI, while the Chief Public Information Officer was summoned, an officer from a different department had appeared. The hearing, after initial submission of the appellant, was adjourned for a later date.
This case has a precedent in January 2015 when a similar query had appeared before the CIC. The complainant from Mumbai had appealed to the CIC after an RTI seeking information on six points relating to LPG subsidy provided directly to the consumers by the Oil Companies through AADHAR enabled bank accounts of beneficiaries had failed to elicit a response.
In that case the Information Commissioner had ruled that ‘the NPCI is associated with the scheme as a system provider and not as stake holder. The information sought for by the complainant did not fall within the domain of the NPCI.’
Apart from being owned entirely by banks, the NPCI has also come under fire from fintech wallet companies such as PayTM and PhonePe regarding issues of ‘neutrality’.
A Times of India report said in 2017, 74.5 percent of the shareholding is by the 10 promoter banks. However, 58 percent of the shares are held by PSU banks.
The same report claimed that at a NITI Ayog meet in 2017, payment industry leaders like Paytm’s Vijay Shekhar Sharma and PhonePe’s Sameer Nigam had questioned the NPCI’s move to allocate the government outlay of Rs 495 towards the BHIM app instead of offering it to all apps. They had urged Prime Minister Narendra Modi to ensure the neutrality of NPCI.
“There is a need for improved transparency provisions to the organisations that operate critic public infrastructure such as the Direct Benefits Transfer enabling Aadhaar Payments Bridge. Irrespective of percentage of ownership by the government, the entity has to be under RTI,” said Srikanth.
BHIM, a privately-owned application, is managed and operated by the NPCI, a private entity. It has, however, received wide promotion and funding by the government. Finance Minister Arun Jaitley, in his budget speech in 2017, had also announced schemes for the app.
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