The Hindu Business Line : Bank of Maharashtra tightens vigilance regime

THE Bank of Maharashtra Chairman, Mr S.C. Basu, has issued a directive that makes regular credit audit mandatory for all credit accounts over Rs 25 lakh as against the existing rule where such audits are necessary only for credit accounts of over Rs one crore.

The directive also makes it mandatory for the top two officers in each of the bank's 1,280 branches to scrutinise, verify and sign the "exceptional statement" at the end of the day's dismiss (instead of one officer) before it is filed in the permanent record of the bank, Mr Basu told Business Line on Monday.

"In addition to the regular internal audit and vigilance we are now putting in place a preventive vigilance mechanism that will preempt any untoward incident, Mr Basu said.

"Our earlier system only required intermittent credit audit and that too only for credit account of over Rs 1 crore. I have now said that the security position of accounts over Rs 25 lakh has to be regularly monitored so that the system is not open to abuse and the bank does not end up losing," Mr Basu said.

Mr Basu who arrived in the city after cutting short his business visit to the US after the CBI raided the bank's headquarters and residences of its top officers including its Executive Director, Mr A.V. Dugade last week said that the bank's board is scheduled to meet next week to discuss, among other things, `staff accountability.'

"Individuals are not important at this stage. What is important is to find out what happened and tackle the issue. The CBI raid does not mean that our officials are guilty unless proved to be so. Our internal vigilance committee will go into the matter to get to its roots," he said and added, "The law will take its own course."

Replying to a specific query about the regulatory authority's stand on the situation that has arisen in the bank, Mr Basu said he had already had discussions with the regulatory body. "The regulatory body has reiterated that we have to strengthen our internal audit mechanism and set up a preventive vigilance mechanism, which is what I have done."

Mr Basu, however, maintained that the CBI raid and the subsequent filing of cases against its Executive Director and other officials was not a crisis. "The accounts in question have been in existence for many years. They became NPAs in the year 2000 and have been provided for," he insisted.