Senior citizen trust moves court, alleges foul play in selection of 37 independent directors The controversy over the appointment of 37 independent directors on the board of government banks and 33 of them having allegiance to the Congress has now been taken to the court. This issue was first raised by The Indian Express in its edition dated May 6, 2007.Challenging the appointments, Vadodara-based Senior Citizens Service Trust has filed a public interest litigation (PIL) in the Gujarat High Court. Trust secretary Praful Desai submitted before the court that these appointments were not done on merit but to favour the politicians connected with the Congress and its allies in the UPA government.He contended that the appointment of independent directors, also known as ‘non-official directors’ in banking parlance, was done by the Department of Banking of the Union Finance Ministry in violation of norms and guidelines.Submitting rules regarding the appointment of independent directors in the public sector banks, 70-year-old Desai, who has fought several legal battles for public welfare, claimed in the PIL that the appointments were done under Section 9(3)(A) of the Banking Companies (Requisition and Transfer of Undertakings) Act, 1970. According to Clause H of Section 3, nominated directors should be at least graduates and possess special knowledge or practical experience in agriculture and rural economy, banking, cooperative, economics, finance, law, small scale industry or any other field, which, in the opinion of the Reserve Bank of India, could be useful to the bank. Other conditions are that he/she should represent the interest of depositors or that of farmers, workers and artisans. These rules, the PIL claims, were received by the trust from the Union Ministry of Finance through an application filed under the Right To Information Act. Desai said that while the Department of Banking, which is handling the appointment, did not furnish him the educational qualifications and expertise of all the 37 directors, it said the educational qualification of Gujarat Congress leader Maulin Vaishnav, appointed as director of the Bank of Baroda, was reduced as he belonged to the farmers category. According to the petitioner, the Department of Banking had prepared a list of 60 top-notch professional experts for appointment, but they did not place it before the Cabinet Appointments Committee, and selected 37 directors. They included five All India Congress Committee secretaries, a vice-president and a secretary of the All India Mahila Congress and the Seva Dal. Claiming that the main reason behind the huge amount of non-official directors is favouritism and non-adherence to norms for advancing loans, the petitioner said the role of independent directors with expertise in various fields was to check corporate misgovernance in banks. But, he pleaded, this objective could never be achieved by the way the UPA government had made the appointments.
