Freeing more tiers of the banking sector from the purview of the CVC has been a long-standing demand of PSU banks. Banks have pointed out that the lurking fears of a probe by the Commission are having an adverse impact on decision-making.
Sarbajeet K. Sen
New Delhi, Nov. 21
THE Central Vigilance Commission (CVC) is unlikely to loosen the grip on the top echelons of public sector banks. The commission is understood to have expressed its reservations against the Government's proposal to remove all officers below the board-level appointees in PSU banks from its purview. At present, all officers above Scale-IV in public sector banks fall within the jurisdiction of the CVC.
However, the Ministry of Finance had proposed that in order to allow senior bank officials to work without fear of intervention from the investigative authorities, those in scale-V and above should be taken out of CVC's jurisdiction.
The Finance Ministry had felt that removing the CVC's sword would be a much-needed step in levelling the playing field between public sector and private sector banks.
However, the Finance Ministry has not yet given up hope. According to documents available with Business Line, the Ministry has decided to ask the CVC to have a fresh look at the issue. The Reserve Bank of India is also independently looking into it.
Freeing more tiers of the banking sector from the purview of the CVC has been a long-standing demand of PSU banks. Banks have pointed out that the lurking fears of a probe by the Commission are having an adverse impact on decision-making. Banks have argued that even a valid commercial decision might appear to be wrong or influenced , if the loan later turns out sub-standard even due to extraneous reasons.
In such instances, officers often find themselves landing into investigations years after the sanction of the loan.
The Finance Ministry had agreed with the bankers and felt that senior officers of public sector banks should be able to take decisions on "sound professional consideration without any undue fear of outside agencies."
The Ministry had felt that bankers, being part of commercial organisations, are often required to take risks for business growth and development.
It had, in fact, suggested that along with the CVC, senior bank officers should also be taken out of the purview of the Central Bureau of Investigation. However, it pointed out that such a move would require legislative amendments. The CVC, on its part, has already done its bit to provide a special dispensation to PSU banks.
In view of it nature of operations, the commission, in its vigilance manual for the public sector, had incorporated a separate chapter applicable only to PSU banks that sought to provide special treatment. The chapter was especially meant to address the concerns raised by the banking sector.