Government Acting Tough Against Top Officials in Banks & Other Financial Institutions

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Due to wrongdoings of certain errant big business houses, Banks have been continuously turning into red via huge NPAs. With this Government and the Reserve Bank of India officials have been continuously monitoring Bank officials as culprits as if they are doing wrong and distributing public money. Heads of public sector banks are being watched by CVC. Even the officials among the top management down the stream are also facing threats of charge sheets, enquiries, loss of pay, and even dismissals.

According to a news appearing on the website of Economic Times dated 29-09-2016 two existing executive directors of nationalized Banks and one ex-chairman of SBI have been facing the heat of CVC and CBI for various irregularities in Big Loans. Cases have been registered by CBI, besides searches at various places against ex-chairperson of United Bank Ms. Archana Bhargava for various misdeeds. Against former chairman of LIC, Mr. S K Roy certain cases have propped up and CBI has started investigation. Chairman of Bank of Maharastra, Mr. Sushil Mahnot was removed just a few days before his normal retirement. At the behest of Supreme Court, enquiry was ordered for financial wrongdoings in IFCI.

Accountability has been made a tool for such investigations. But there should be a line of demarcation between:

  • Genuine business loss and rise in NPA
  • Deliberate irregularities because of mala-fide intentions of borrower resulting therein rise in NPA
  • Deliberate irregularities because of careless attitude of recommending and sanctioning authorities result being increase in NPA

These wrongdoings are not only because of corruption, there may be other reasons also like:

  • Pressure from the Bosses down the stream
  • Career aspirations.
  • Fear of not meeting the hefty/huge targets
  • Fear of losing existing business to other institutions in the same field.
  • Cases of suicides and ending their lives

After the crack down on the officials by CVC and CBI, a fear factor has entered in the Banking/Financial sector, which may result in stopping even the routine business decisions and these sectors turning non-performers.

But the question is why only the Banks/Financial institutions. In every field, if any financial transactions occur there is possibility of corrupt practice. High level of corruption also prevails in various departments of central and State Governments.

Anything done with mala-fide intention must be punished, may it be Client or errant officials. But suspecting all officials as culprits should not be the policy. Government has to act with proper care, due diligence and take logical decisions.

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