New Delhi: Demand to protect honesty Bank employee‘Govt’ has come out withemployee accountability frameworkUnder which the concerned officials will not be caught if the actual decisions related to loans up to Rs 50 crore are wrong.
As per the norms issued by the Finance Ministry, the framework will only include genuine decisions and not those with malafide or malicious intent.
It specifies the details and procedures for investigation of such acts of omission and commission on the part of the concerned bank officials. To save them from unnecessary trouble, the framework also provides for settlement of such cases against bankers.
“Banks to initiate and complete staff accountability exercise within six months from the date of account classification” NPA,” the ministry said.
Several senior bankers have been arrested in the past for non-payment of loans. The latest case is the arrest of the former chairman of SBI. Pratip Chowdhary In a case where the loan turned into a Non-Performing Asset (NPA).
The fear of the 3Cs – Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC) and Comptroller and Auditor General (CAG) often deters bankers from taking commercial decisions that are likely to go bad. The government and other stakeholders are taking steps to allay the apprehensions.
The October 29 framework follows detailed standard operating procedures (SOPs) for different categories of NPAs, depending on the amount.
As per the guidelines, these accounts are divided into three categories – NPAs up to Rs 10 lakh, Rs 10 lakh – Rs 1 crore and accounts above Rs 1 crore up to Rs 50 crore.
It said the accountability of the employees is to be examined as per the extant guidelines in the total outstanding NPA accounts of more than Rs 50 crore.
Commenting on the framework, Punjab and Sind Bank Managing Director S Krishnan said that it is a well designed framework and will go a long way in instilling confidence among bankers.
He said the guidelines will help in propelling credit growth as it helps clear doubts from the minds of bankers.
However, he added that the arrest of the former SBI chairman would certainly demoralize the bankers.
According to reports, Jaisalmer Sadar Police on Sunday arrested former chairman Pratip Chaudhary from his Delhi residence in an alleged loan repayment case.
It said that the guidelines on employee accountability framework for NPA accounts up to Rs 50 crore (except in case of fraud) have been finalized in consultation with the Central Vigilance Commission.
Banks have been asked to revise their existing guidelines and implement the framework for accounts turning NPAs on or after April 1, 2022.
Once the matter is referred, the audit vertical may rely on the audit reports of the last four years as well as other investigation or inspection reports such as branch inspection reports, special reports and credit process audits.
“If during the above four years period, the available information is not sufficient, the designated vertical may call for additional information from the branch or controlling office etc. or collect the same itself,” it said.
It also stressed the need to strengthen the internal audit system with adequate manpower and technical support.
Noting that a growing economy heavily depends on bank credit, the ministry said that the government and the RBI have on several occasions expressed their concern over slow credit offtake and emphasized the alleviation of fear in business decision-making.
The objective of this framework is to keep the employees safe for their actual action as well as make them accountable for any wrongdoing or any inaction on their part.
It is noted that accountability of employees is necessary only to identify and penalize those employees who are prima facie responsible for non-compliance of prescribed systems and procedures or non-compliance with norms.
The objective of employee accountability is not to discourage initiative and decision-making exercise, the ministry said, adding that the bank’s approach to employee accountability should be to instill confidence among the executives for decision-making and to examine the reasons for opening the account. needed. In NPAs and for non-recovery of bank funds.
As per the norms issued by the Finance Ministry, the framework will only include genuine decisions and not those with malafide or malicious intent.
It specifies the details and procedures for investigation of such acts of omission and commission on the part of the concerned bank officials. To save them from unnecessary trouble, the framework also provides for settlement of such cases against bankers.
“Banks to initiate and complete staff accountability exercise within six months from the date of account classification” NPA,” the ministry said.
Several senior bankers have been arrested in the past for non-payment of loans. The latest case is the arrest of the former chairman of SBI. Pratip Chowdhary In a case where the loan turned into a Non-Performing Asset (NPA).
The fear of the 3Cs – Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC) and Comptroller and Auditor General (CAG) often deters bankers from taking commercial decisions that are likely to go bad. The government and other stakeholders are taking steps to allay the apprehensions.
The October 29 framework follows detailed standard operating procedures (SOPs) for different categories of NPAs, depending on the amount.
As per the guidelines, these accounts are divided into three categories – NPAs up to Rs 10 lakh, Rs 10 lakh – Rs 1 crore and accounts above Rs 1 crore up to Rs 50 crore.
It said the accountability of the employees is to be examined as per the extant guidelines in the total outstanding NPA accounts of more than Rs 50 crore.
Commenting on the framework, Punjab and Sind Bank Managing Director S Krishnan said that it is a well designed framework and will go a long way in instilling confidence among bankers.
He said the guidelines will help in propelling credit growth as it helps clear doubts from the minds of bankers.
However, he added that the arrest of the former SBI chairman would certainly demoralize the bankers.
According to reports, Jaisalmer Sadar Police on Sunday arrested former chairman Pratip Chaudhary from his Delhi residence in an alleged loan repayment case.
It said that the guidelines on employee accountability framework for NPA accounts up to Rs 50 crore (except in case of fraud) have been finalized in consultation with the Central Vigilance Commission.
Banks have been asked to revise their existing guidelines and implement the framework for accounts turning NPAs on or after April 1, 2022.
Once the matter is referred, the audit vertical may rely on the audit reports of the last four years as well as other investigation or inspection reports such as branch inspection reports, special reports and credit process audits.
“If during the above four years period, the available information is not sufficient, the designated vertical may call for additional information from the branch or controlling office etc. or collect the same itself,” it said.
It also stressed the need to strengthen the internal audit system with adequate manpower and technical support.
Noting that a growing economy heavily depends on bank credit, the ministry said that the government and the RBI have on several occasions expressed their concern over slow credit offtake and emphasized the alleviation of fear in business decision-making.
The objective of this framework is to keep the employees safe for their actual action as well as make them accountable for any wrongdoing or any inaction on their part.
It is noted that accountability of employees is necessary only to identify and penalize those employees who are prima facie responsible for non-compliance of prescribed systems and procedures or non-compliance with norms.
The objective of employee accountability is not to discourage initiative and decision-making exercise, the ministry said, adding that the bank’s approach to employee accountability should be to instill confidence among the executives for decision-making and to examine the reasons for opening the account. needed. In NPAs and for non-recovery of bank funds.
.