Bankers should learn to say no to outside pressures when something is “not doable”, Vigilance Commissioner T M Bhasin has said.
“In several cases oral instruction by senior officials are found to be culprit and to obviate such instances, the bankers should learn to say ‘NO’ when something is not doable when they don’t understand an area of activity proposed to be financed,” he told PTI.
“The bankers need to avoid the cases of conflict of interest and must put in place sound risk management practises to safeguard against NPAs and frauds,” he added.
Gross NPA of public sector banks have surged from 5.43 per cent (Rs 2.67 lakh crore) in 2014-15 to 9.32 per cent (Rs 4.76 lakh crore) in 2015-16.
As per the latest Financial Stability Report by RBI, the Gross Non-Performing Assets (NPA) ratio for public sector banks may go up to 10.1 per cent by March 2017, under the baseline scenario.
At the same time, banks have reported frauds of about Rs 16,680 crore during 2015-16. These cases are above Rs 1 lakh.
Rejecting the notion that 3Cs — CVC, CAG and CBI — are hampering lending operations, Bhasin said, CVC understands banks are in commercial and risk-taking business and protects all honest decisions.
On various occasions, bankers have voiced fears that the 3Cs — the Central Vigilance Commission (CVC), the Comptroller and Auditor General (CAG) and the Central Bureau of Investigation (CBI) — act as deterrents for them for not taking lending decisions.
Asked if the charges are true, he said one C, that is CAG, is not auditing the books of accounts or looking into the lending operations or recovery management of public sector banks (PSBs).
As for other 2Cs, he said “the powers and functions of CVC have been laid down in Section 8 of the CVC Act 2003 through which CVC exercises superintendence over functioning of CBI in investigation of offences committed under the Prevention of Corruption Act or offences with which public servants may be charged under CPC”.
There is proper co-ordination and symbiotic relationship between CVC and CBI, he maintained, adding CVC issues directions to CBI either on its own or on a reference by the central government for inquiries or investigation to be made.
CVC, according to Bhasin, periodically reviews the progress of investigations conducted by CBI on a monthly basis and the focus is always on ensuring malafide or actions with criminal intent should not go unpunished.
However, at the same time, all bonafide, rule-based and policy driven actions of the officials are duly protected, he asserted.