The government has directed Public Sector Banks (PSBs) to set up a Committee of Senior Officers to monitor the progress of pending disciplinary and internal vigilances. The Committee of Senior Officers has been tasked to frame timelines to reduce delays in deciding such vigilance cases, an official release said.

The Finance Ministry, while issuing these directions, highlighted that procedural delays in disposing pending disciplinary and internal vigilance cases adversely affects the morale of employees and also breeds inefficiencies in the system.

The latest government directive on this front comes after Finance Minister Nirmala Sitharaman’s meeting with the chief executives of PSBs on December 28 when she asked banks to form committees at the level of general managers to look into all pending vigilance cases against employees and take a call as to whether they should be pursued or closed.

The main objective behind such a directive is to ensure that such cases do not remain unattended for years.

“There have been instances where the employees concerned would have retired and gone away. Due justice is not done for anybody involved in such cases that remain unattended,” Sitharaman had then said.

At that meeting on December 28, CBI Director Rishi Kumar Shukla is understood to have brought to the attention of the Finance Minister that over several years there has been an accumulation of vigilance cases within the banks which they (banks) have to take a call on. They (banks) have kept it as it is without closing them or taking any action.

Banks were also directed not to sit on cases involving the employee, which could be handled through departmental actions itself.

Meanwhile, the Finance Ministry, on Tuesday, detailed the several measures that the government has taken to protect honest commercial decisions of bankers, while reiterating the Finance Minister’s assurance that distinction would be made between genuine commercial failures and culpability (of bankers).

The measures taken by the government on this front include introduction of Section 17A in Prevention of Corruption Act requiring prior permission before initiating investigation against a public servant.

The government has also constituted an Advisory Board for Banking and Financial Frauds (ABBFF) for first level of examination of suspected frauds in excess of ₹50 crore.

Also, the personal responsibilities of MD and CEOs of PSBs for compliance with prescribed timeslines have been done away with. Powers have been delegated by Department of Financial Services (DFS) to the boards of PSBs to put in place a suitable mechanism for ensuring compliance of the various timelines laid down in RBI and CVC circulars.

The Centre has also aligned the norm requiring c ompulsory examination of fraud for all NPA accounts exceeding ₹50 crore with the CVC circular of January 15 this year, whereby all such cases of suspicious fraud are to be initially referred to the ABBFF.

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