Money & Banking

Family members on rolls seen as a liability for Catholic Syrian Bank

V Sajeev Kumar Thiruvananthapuram/Kochi | Updated on February 05, 2018 Published on February 05, 2018

A couple of cases have stirred the hornet’s nest and led to protests from bank unions

Nepotism is good for you if you want to progress at the workplace. After all, an uncle or brother or brother-in-law at the right place can pull the necessary strings and give your career a leg-up at a crucial stage — or prevent it from going into a downward spiral at the right moment.

Indians working in the corporate sector aren’t unfamiliar with these strategies for upward mobility.

And yet, there are downsides too. Having your family members/friends at your workplace can often lead to uncomfortable situations or even potentially hurt relationships. And can certainly harm the institution concerned.

Catholic Syrian Bank (CSB), an old private sector bank, is learning this the hard way. A couple of cases involving retiring bank officials came up recently which has stirred a hornet’s nest and led to protests from bank unions.

Banks have a rule that if retiring employees are involved in any litigation, the vigilance department initiates necessary steps at least three months in advance to close those cases. This is the pattern followed in most banks where the chief vigilance officer (CVO) is an external person. But CSB earlier had an insider as its CVO.

Senior bank officials said that the ‘quick mortality’ cases (accounts which become NPA within one year of original sanction or first disbursement) had been kept pending for a long time by the CVO and he would refer them to the top management only on the eve of retirement of the employee, hinting that the account had turned an NPA due to business loss.

He seemed to be more interested in shielding the employees than protecting the bank’s interests.

Cessation of service

The board took note of this and instructed that a new CVO be chosen from outside. A retired chief general manager of SBI, who worked as CVO in Vijaya Bank, has since been brought in.

Investigation of quick mortality and NPA cases has been handed over to retired executives from other banks.

A CSB officer responsible for creating huge NPAs was found to have been involved in many cases of reckless lending. No action was ever initiated against him since he had relatives in the HR and vigilance departments.

All his cases were put up just a day before retirement necessitating cessation of service to allow regular inquiry. That may have been a rare instance but the problem of familial interventions continues to be a bugbear.

The fact that a large number of employees in the bank are related to one another doesn’t help matters, CVR Rajendran, MD and CEO of the bank conceded. Reports relating to 52 people retiring on November 30 last were submitted only on the previous day.

Of these, three cases are found to be very serious involving significant financial implications. They have been put on cessation.

Trainees face termination

Meanwhile, All India Bank Officers Confederation said that a few of the about 82 young trainee officers who were recruited in January 2016, and who paid ₹45,800 each as training fees, are facing termination. The promise was that they would be confirmed in service after a probation period of two years, during which they would be paid a consolidated monthly stipend.

Asked for comments, Rajendran said that trainee officers were recruited as marketing officers from various MBA institutes and were given a business target. Some of them have performed well and so have been confirmed in service. Some others have been given a six-month extension on probation.

A third set with dismal performance record is still with the bank, but the management has not yet taken any decision to extend their probation or terminate their services. All these were part of moves to bring ‘a performance culture in the bank’, Rajendran said.

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Published on February 05, 2018
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