A top CVC official told dna that he has disposed of numerous vigilance cases of senior bankers who had to pay a price for genuine business decisions that went wrong.
Inundated with bogus vigilance cases against bankers, the Central Vigilance Commission (CVC) has instructed chief vigilance officers (CVOs) of all banks to review the complaints and verify if there is any malafide intention in their business decisions, before sending them to the commission.
A top CVC official told dna that he has disposed of numerous vigilance cases of senior bankers who had to pay a price for genuine business decisions that went wrong.
According to the norms, bankers could not be promoted or retired unless CVC gave them a clean chit.
"We get 10-15 cases every day, to decide whether to pursue action or to give clean chit to respective bankers. It is not necessary that all the cases we received bound for action and being done for malafide intention. Bankers are not supposed to be charge-sheeted in genuine sanctions," a top CVC official told dna.
According to official sources, for the first time, the CVC has initiated a dialogue with the CVOs to define terms like 'fraud' and 'diversion of funds'; if funds are diverted, but the business does not suffer it is not a fraud.
"It should be review and recheck twice before sending it to the commission. It is incorrect to greet every case with suspicion and scrutinise for evidence for malfeasance. It is noticed that vigilance fear has resulted in banks sitting on credit sanctions, which is not good for the entire banking sector," said an official.
Vigilance commissioner TM Bhasin told dna, "We have asked the banks to review all the cases that are under investigation. In cases where there is a vigilance angle involved, we examine if the intentions are bonafide so that such cases can be excused. In cases where there is a disciplinary action that is required, we will not be able to let off the cases."
Many public sector banks are seeing this as a positive move and believes this will reduce fear factor among bankers who play a vital role in credit sanctions.
Arundhati Bhattacharya, chairman, SBI, told dna, "It will encourage bankers to take decisions and clear proposals faster. Credit decisions will certainly be faster. So far bankers were fearful of taking decisions in many cases even if intentions were bonafide. This fear will go."
Ram Sangapure, executive director Punjab National Bank (PNB), told dna, "We have also heard of the vigilance commissioner's move to examine genuine cases but we are yet to get a written communique."
"It will create a favourable ambiance for bankers and restore confidence in sanctioning loans. We also have certain cases pending like all banks which may be reexamined under the new directive," said Sangapure.
According to CVC, this kind of check/reviews of cases before prosecution would make banking hassle-free. For any kind of loan application, it goes to 50 people for sanctioning, and for that one have to run several times before the banks, despite all the necessary documents which is required.
But if you don't have any lengthy process, then one can apply anytime, the application is processed first.
However, this does not mean that banks avoid proper due diligence and know-your-company (KYC) norms. Of course, bankers have to take decision on its merit. But a systematic and fast procedure can be done without any kind of improper or illegal moves, say industry officials.
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