HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
Govt’s new measures to protect prudent commercial decision of bankers
Jan-29-2020

In order to protect prudent commercial decision of bankers, the government has taken a slew of decisions, including doing away with personal responsibilities of MD and CEO of Public Sector Banks (PSBs) for compliance in dealing with large value frauds committed by bank officials. Powers have been delegated by Department of Financial Services (DFS) to the Boards of public sector lenders to put in place a suitable mechanism for ensuring compliance of the various timelines laid down in RBI and CVC circulars.

Similarly, the instructions of DFS of 2015 regarding compulsory examination of fraud for all NPA accounts exceeding Rs 50 crore have been aligned with the CVC circular of January 15, 2020 whereby all such cases of suspicious fraud are to be initially referred to the Advisory Board for Banking and Financial Frauds (ABBFF) headed by former vigilance Commissioner T M Bhasin.

Finance Minister Nirmala Sitharaman at several times assured bankers that adequate measures would be taken to protect honest commercial decisions taken by them and distinction would be made between genuine commercial failures and culpability. There are widespread apprehension that bankers could be hauled up for their bona fide commercial decision go wrong. Besides, with aim to ease concerns, the finance minister had assured the bankers that a distinction would be made between genuine commercial failures and culpability last month in a meeting with heads of the public sector banks (PSBs), which was also attended by the CBI Director.

  RELATED NEWS >>