By Rusiripala Tennakoon –

People’s bank has been ordered to provide the information sought by an Appellant which they rejected earlier after a long drawn RTIC Appeal (In- Person hearing) inquiry held under section 32(1) of the Right to Information Act No.`12 of 2016. The details of the order adopted by the Commission in two stages is given below.

The Appellant an ex-employee of the Bank, by information request dated 19.06.2018 requested for the following items of information;

1. Total expenditure incurred from 2015 to the end of June 2018 for and in connection with Banks Digitalization(IT) project with a breakup for hardware, software system installation & testing, consultants fees, reimbursement, part payments in advance made during this period.

2. The particulars of salaries, wages, ex-gratia payments, bonus (including performance bonus) expenditure incurred by the bank for overseas trips and details of all other perks provided by the bank – Vehicle allowance, special allowance, entertainment expenses, travelling grants incurred by the bank on account of contract employees from 200 to 2018 June with details of positions held by each Contract Employee during the period including the particulars of any change in position held by each Contract Employee during the period including the particulars of any changes in positions, grades or level of employment in respect of each employee separately.

Information Officer of the bank rejected the release of information under section 5(1)(a), (d) and (f) of the RTI Act. Dissatisfied with this response the Appellant lodged an appeal with the Designated Officer of the Bank on 13.07.2018. The DO reaffirming the decision of the IO responded on 17.07.2018 rejecting the provision of information sought by the Appellant. The Appellant thereafter preferred an appeal to the RTI Commission on 05.10.2018.

When the Commission took up item no.1 for hearing, Bank submitted that the requested information is commercially vital for the continuation of the ongoing Digitalization process and it is bound by contract to a third party. Bank submitted further that there is no larger public interest in the information requested. The Appellant countered both these positions. RTIC directed both parties to tender written submissions more fully substantiating their positions and directed the bank to submit to the perusal of the RTIC, contract details with regard to the Digitalization Project. The In- Person hearing commenced.

After a long and protracted process of arguments for and against, the RTIC made the first ORDER on 02.07.2019.

Where item 1) of this information request is concerned, the Appellant has requested the Total expenditure in the installation and testing of software and hardware as per each category listed therein. On the facts as presented before us, the provision of this information does not appear to be precluded by any of the exemptions contained in Section 5(1) of the RTI Act. In fact, the public interest in disclosing this information is demonstrably high as the matter involves the expenditure of public funds.

The PA (bank) is directed to revert on the total expenditure in relation to the Digitalization of the PA by breakdown as per each category as requested by the Appellant on the next date on which this Commission’s ruling on item2) of the said information request will also be considered in the wake of the submissions made by both parties.

On the next date, (21.01.2020) of the Appeal {In-Person Hearing}, the PA(Bank) submitted that in relation to the other request, now the information is known, subsequent to the proceedings of the Committee on Public Enterprises (COPE). The Appellant disagreed with this contention and stated that the information released before the COPE was limited to certain specific financial irregularities only and does not encompass the information request. And the Appellant further submitted that he is in receipt of the records and reports of the COPE proceedings and he would furnish those before the commission. RTIC ordered both parties to clarify whether the specific information in relation to the request has been released before the COPE. Appellant was directed to submit a copy of the COPE proceedings for the perusal of the Commission.

While the appeal hearing was proceeding the PA(Bank) tendered to the RTIC a summary prepared by the A.G.M. Banking Support and Administration dated 06.08.2019, of the payments made and balance payments to be made in respect of the Digital banking project to two companies, for the perusal of the Commission.

The appellant accepted that this information satisfies the information requested by him in item 1 of the information request.

Produced below is an extract of this letter of disclosure.

Quote; “Appeal no.774/2018 under Right to Information Act

                Name of Appellant: Mr. T.Rusiripala

               With reference to your letter dated 31^st July 2019 regarding the above subject, the summary of the payments made to below companies and balance payments to be made are below listed for your reference.

              Payments made to M/s Silverlake Digital Economy Sdn. Bhd. for the Application software of Digital banking project- Total cost US$ 7,600,000/-

        No.                                                     Total cost                    Phase                                 Amount Paid       balance to be paid          

                                                          (in US$ Mn)           Phase 1           pahase 11                                                                 

1. SCIM platform                       2.18                      2.18                –                                   2.18                                                   –
2. SCIM internet banking        1.98                       0.99            0.99                               1.683                                             0.297
3. SCIM mobile banking          0.5                         0.25            0.25                               0.425                                            0.075 
4. SCIM express banking        0.88                      0.88                                                     0.88                                                   –
5. SCCIM Retail LOS                 0.98                                         0.98                               0.686                                           0.294
6. SCCIM corporate LOS          1.08                                         1.08                                 0.756                                            0.324

Total                                                  7.6                   4.3               3.3                                       6.61                                                   0.99

Payments made to ,M/s Just in Time  Technologies pvt Ltd for procure of Hardware and software  for Digital Banking project 

Total cost                                           USD 3,313,700.19

Additional expenses incurred        Lk Rs. 84,631,716.00 plus applicable taxes

If you have anything to be clarified please contact the undersigned.

K.A.Nihal

Assistant General Manager IT

Business Support and Administration 

(this is a reproduced letter in the way it is written)

The hearing proceeded in respect of Item no.2 of the Information request.

After written submissions and several rounds of In-Person Hearing the RTIC gave the final Order issued under the reference of RTIC Appeal 774/19   of 02.12.2020.

“In view of the public interest demonstrated during the proceedings of the instant appeal justifies the disclosure of the information , this commission directs the release of the particulars of salaries ,wages, ex-gratia, payment , bonus(including performance bonus )expenditure incurred by the bank for overseas trips and details of all other perks provided by the bank, -vehicle allowances , special allowances ,entertainment expenses, travelling grants incurred by the bank  on account of officers recruited to the Senior management level from the year 2010-June, 2018 as affirmed by the Appellant in the proceedings and record of this Commission on 25.08.2020.”  

This information is yet to be furnished through the RTIC to the Appellant.

In the meantime, it would also be of Public Interest to Examine some relevant facts associated with this request.

During  September 2016, the subject of Digitalization in the PB became a widely discussed matter in the context of an alleged fraud involved in the transaction with a heavy media focus on the issue and  assumed proportions of a public scandal. So much so, it became the headline news in most of the news papers.Bank had to carry a full page paid advertising supplements in all the newspapers to counter the allegations. Papers reported about some directors complaining the Prime Minister. Some Directors resigned. The issue was raised in parliament on 9^th September 2016, in response to which  a Ministerial Committee of inquiry was appointed by the Minister in Charge of the State Banks to inquire into and report on the allegations made. Special Audit examinations were conducted. Among those irregularities high-lighted;

1. The external consultant to the Technical evaluation committee for ICT procurements in the bank since 5/7/2013 withdrew from it due to the following reasons;

• Changes to terms of reference (TOR) of the TEC made in an ad-hoc manner by the Head of IT/Chairman TEC.
• Malpractices in procurement process violating general principles of Public procurement Procedure
• Inconsistency occurred in internal bank test procedures in testing computational devices for the core banking environment

                 (His letter of resignation dated 14/7/2015 was addressed to Hemasiri Fernando,  Chairman PB)

2. The ministerial committee subsequently appointed to inquire into the Process of Tender for Digitalization of the Peoples Bank on 3/10/2016 has made the following observations inter-alia;

• The best practice would have been or the bank to appoint an independent committee with External IT experts to analyze and evaluate the existing system and to propose a new system for the digitalization to ensure that the scope features and functions had been clearly defined in the proposed system before preparing the RFP for bidding purposes
• The bank proceeded with the procurement process without having an independent Technical Evaluation. In doing so accepted the recommendation made for the hardware by the suppliers.
• Bank proceeded the procurement process with the BOM and the specifications provided by Silverlake, the soft ware provider without considering cost.
• Since the quotation being received from a single bidder, there was no comparable prices available to justify the quotation. The Bank has not made an attempt to evaluate the price in the absence of other comparable prices.
• In the assessment of Hardware requirements for purchase the bank depended on the system provider and did not carry out an independent assessment.{ conflict of interest} 
• Has shown shortcomings in the procurement section of the manual of the bank which need to be corrected to enhance transparency, value of money and efficiency. 

3. There was Only one bid received from JUST IN Time Holdings Pvt Ltd. (JIT)
4. Favored Recruitment has been alleged to the Head of IT post directly related to the transaction process amidst protests from trade unions.
5. The Auditor General has clarified as follows to Chairman PB on 21 September 2016;

• As per the Procurement manual, supliers/contractors for purchasing of equipment over RS.10 million should be selected by a PUBLIC TENDER. But the Bank had called for limited tenders only from IBM authorized companies to purchase IT equipment by violating Manual guidelines.
• Bank had violated the laid down procedure to have a TEC of 05 members (inclusive of 02 external members) by appointing 05 internal members
• According to the manual the offers should be open for 6 months, but in this instance the bidder JIT has given a validity of only from 11^th June to 30^th July. It was questionable to the Audit how the TEC has recommended the supplier as complied.
• Audit has noted that the bank has not given adequate time frame for suppliers to submit the bids for the tenders because only 06 working dates were given.  

All in all it appeared to be a well- guarded maneuver with full cover up. Finally the affair culminated into a COPE inquiry where the entire Board of Directors and topmost officials were summoned. The highly technical nature of the subject was made the escape-goat for those involved to claim innocence. It is revealed that the person recruited as Head of IT  left the bank soon after and joined the disputed supplier company! Ironically, when the COPE chairman asked where he is now, the CEO of the bank informed the COPE that “he is in Sri Lanka!”. 

Bank filed defamatory actions against media institutions which exposed the deal but later withdrew them. Another defamatory case filed against a whistle blower is still pending due to the respondent refusing to accept the pre-conditions of the bank to withdraw the case. It will be interesting to find out how much the bank has and is spending on account of these cases as high legal fees to outside lawyers retained by the bank! 

The rejection of releasing the information, about the actual expenditure involved (eventually released) has taken place in such a background. It is interesting to note how the then Chairman of the bank, Hemasiri Fernando confessed before the COPE. According to his own admission before the COPE “it has taken 2 ½ to 3 years for him and the Board to realize what has happened. After 3 years he has understood that they have paid 200% more. First, we were told that the total expenditure for the Digitalization would be Rs.745 million but after 3 years we had paid more than Rs.2 billion. We did not know this, when the person in charge of the subject from the IT department and the general manager recommend we pay”.

But he did not disclose that it is he who initiated to recruit him even without the required qualifications.

What a colossal loss! And there is no one responsible. Chairman resigned. Board changed. Head of IT has been employed in the Supplier company. GM/CEO asked to resign granting a few additional annual increments enhancing his pension which is well above Rs 750,000/= per month and sent home with a BMW for his use during his retired life.

The information that the RTI has ordered to be released about the hired contract employees will be more alarming in the Public domain because of the tremendous cost to the State and the highly unproductive occupation of these hirelings over a period of time. 

The skeletons will continue to remain in the cupboards as long as State funds can be misused to keep them under cover. Come what may, the Truth will have to be exposed, even in the face of the hazardous and painful duress thrust upon those becoming victims of expensive legal actions.