Chiefs of 6 banks under CBI, ED scanner: Finance Ministry

No arrests have been made: Ministry

The Central Bureau of Investigation (CBI) and the Directorate of Enforcement (ED) are probing cases against the managing directors or chief executive officers of six scheduled commercial banks. However, no arrests have been made, according to the Finance Ministry.

To a query in Lok Sabha, the Ministry on Monday said as per existing guidelines, the Central Vigilance Commission (CVC) had been given powers to act on whistle-blowers’ complaints.

Chief Vigilance Officers of the Ministries or government departments are the designated authorities to receive written complaints or disclosures on any allegation of corruption or misuse of office by any employee.

“Fundamental governance reforms of far-reaching significance have been effected in public sector banks (PSBs). To strengthen governance at the board level, the position of chairman and managing director has been bifurcated into a non-executive chairman and an MD & CEO,” the Ministry said. A Banks Board Bureau has been created for arm’s length selection of non-executive chairmen and whole-time directors (WTDs). Performance-based extensions have been instituted for WTDs.

The Ministry said comprehensive reforms to institutionalise responsible banking had been effected through codified policies and audited procedures for prudential lending, and robust data-driven risk assessment and monitoring.

The board-approved loan policies of PSBs now mandate tying up necessary clearances and linkages before disbursement, scrutiny of group balance sheet and ring-fencing of cash flows, non-fund and tail-risk appraisal in project financing.

“Monitoring has been strictly segregated from sanctioning roles in high-value loans, and specialised monitoring agencies combining financial and domain knowledge have been deployed for effective monitoring of loans above ₹250 crore,” said the Ministry.

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Printable version | Feb 17, 2020 1:21:39 AM |

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