IBA Seeks Breather From CVC Glare

Mumbai, Aug 29: | Updated: Aug 30 2003, 05:30am hrs
Banks and financial institutions (FIs) are likely to get some lee-way from the Central Vigilance Commission (CVC) while taking commercial decisions. The Indian Banks Association (IBA) has been deliberating with the CVC, the Reserve Bank of India (RBI) and the Centre to provide banks and FIs more power in their decision making.

In respect of public sector banks, the haunting fear of vigilance before taking commercial decisions needs to be lessened, if not eliminated, IBA chairman Dalbir Singh said at the 56 annual general meeting of IBA, held on Friday in Mumbai. Dr Singh also mentioned that so far, the response from is positive from CVC. We want some exemptions on case to case basis, which would facilitate the decision making, a chairman and managing director (CMD) with a public sector bank told FE on the condition of anonymity. The internal vigilance mechanism in banks should rather be strengthened to safeguard against fraudulent activities. The internal vigilance officer, who play an advisory role to banks, should be empowered, the CMD said.

Dr Singh mentioned that some progress have been made in this regard (lessening of CVC interference). But more needs to be taken up, he said.

Decisions by scale three and above officers come under the CVC scanner. There is also a suggestion to omit this clause, which effectively means, bankers feel that responsibility to CVC should be irrespective of any hierarchy. Dr Singh also touched upon the importance of better remuneration for the public sector bankers. Being a service industry, in the final analysis, the performance of a bank depends ultimately on the quality of its manpower. One could get the best people only if the compensation is competitive, he said.

IBA chief executive and secretary HN Sinor said that the vision statement of IBA would be ready by end-September 2003.