Bengaluru: In a move to boost transparency in the cooperative banking sector, the Karnataka Information Commission (KIC) has ruled that the Karnataka State Cooperative Apex Bank qualifies as a public authority under the Right to Information Act, 2005.The order passed on Feb 9 by a bench presided over by state information commissioner Rajashekara S came after a second appeal by a citizen seeking loan-related documents.The saga began on May 9, 2024, when Hanamanth Vasant Shinde from Mudhol taluk, Bagalkot district, filed an application under the RTI Act. Shinde sought details from the bank regarding documents and explanatory notes submitted by Nirani Sugars Ltd for loans availed between March 2022 and June 2024.However, in a reply dated May 21, 2024, the bank rejected the request, citing an earlier order of the commission and maintaining that it is not a “public authority” under the RTI Act. Shinde filed his first appeal before the registrar of cooperative societies. The registrar’s office, however, returned the appeal, stating that the bank’s president was the designated first appellate authority. Left with no remedy, Shinde approached the commission with a second appeal on Aug 12, 2024.In its defence, the Apex Bank argued that it is a cooperative society registered under the Karnataka Cooperative Societies Act, 1959, carrying out banking business for its members in accordance with its bylaws and regulatory directions. It contended that it is neither owned, controlled, nor substantially financed by the state govt, and therefore does not fall within the definition of a “public authority” under the RTI Act. The bank also relied on earlier high court rulings and the commission’s orders to argue that such cooperative institutions are outside the RTI framework and that the appeal was not maintainable.In its observations, the commission noted that the bank was established by the registrar of cooperative societies in his official capacity and later designated as the state cooperative bank. It found that the govt has contributed to its share capital and continues to exercise significant administrative and financial control. Senior officials, including the registrar, have powers to inspect records, order audits, and conduct inquiries into the bank’s functioning. The bank’s audited accounts are required to be placed before the state legislature, and its operations are guided by govt policies and directions.The commission also pointed out that govt nominees are part of the bank’s management and that recent amendments to the Karnataka Cooperative Societies Act have also strengthened such oversight. The bank operates within a broader cooperative credit framework, extending loans through district central cooperative banks and primary agricultural credit societies, performing functions closely aligned with governmental objectives, particularly in the agricultural sector.The commission concluded that there exists deep control of the state over the bank. It held that the bank qualifies both as a “state” under Article 12 of the Constitution and as a “public authority” under Section 2(h) of the RTI Act.The commission directed the bank to immediately appoint public information officers and first appellate authorities across its offices and ensure proactive disclosure of information under the RTI Act. It also instructed the principal secretary (cooperation), chief secretary, and registrar of cooperative societies to ensure compliance with the Act without delay.———Roots in co-op movementThe Karnataka State Co-operative Apex Bank traces its roots to the cooperative movement of the erstwhile Mysore state. The movement began in 1905 with the Mysore Cooperative Societies Act, aimed at providing equitable access to credit and promoting people-centric banking. In 1915, MA Narayan Iyengar set up the Mysore Provincial Cooperative Bank to finance and supervise co-operatives, gradually becoming the apex financing hub for the sector.The Bangalore Central Cooperative Bank, founded the same year by K Ramaswamaiah and others, operated separately. Plans to merge the two were resisted, leading the govt in 1925 to convert the provincial bank into the Mysore Provincial Cooperative Apex Bank with statewide jurisdiction. Over the decades, it shifted focus from long-term agricultural lending to housing and consumer cooperatives, adapting to economic changes.Today, the bank operates under dual regulation of RBI and NABARD, with administrative oversight from the state’s cooperation department. Audited accounts are placed before the legislature, and govt representation on the board has expanded.
