Officers’ body for setting up audit commission for public sector banks

The All India Bank Officers’ Association has urged President Pranab Mukherjee to help set up a Banking Audit Commission on the lines of the Comptroller and Auditor General of India (CAG) for the entire banking system.

Voicing concern over the rising incidence of bad loans in the sector, the AIBOA has said the responsibility of auditing the accounts of public sector banks must be given to an external authority/ committee consisting of members with proven integrity and moral standing.

“This audit should be done for the just-ended fiscal and within a fixed time schedule. The report should be submitted to the President,” AIBOA General Secretary S Nagarajan told Business Line , adding “the mess which we are in today is not because of something that has happened in the recent past. It started in the early 90s.”

Endorsing the RBI’s observation on the committee method of sanctioning loans, the association has sought to make every member of the committee accountable, together with the Chairman, the Government representative and the RBI nominee for their failure to check deviations during their tenure, as a result of which such sanctions had turned bad.

Urgent steps need to be taken to declare those defaulters with sufficient resources to clear their bank dues as ‘wilful defaulters under criminal procedure code’, the AIBOA General Secretary said. Bank loan defaulters must also be prohibited from contesting in elections, at any level, the association has urged.

Sharing bank-wise details of bad loans and the amounts written off by the banking system year after year since 2007, Nagarajan appealed to the President to urge Indian Banks’ Association to publish the caution list on bi-monthly basis for the benefit of member banks.

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