Bankers told IANS that there are no service rules for EDs and CMDs other than "terms and conditions"
With several thousands of crore rupee-worth corporate loans given by government-owned banks turning bad, it is high time the top executives are also brought under service/conduct/ disciplinary rules, said a top leader of a bank union.
"Bad loans in the banks, particularly, the big ticket accounts are a potential zone for corruption. Syndicate Bank former chairman-cum-managing director (CMD) S.K. Jain episode is only a tip of the iceberg," C.H. Venkatachalam, general secretary, All India Bank Employees' Association (AIBEA), told IANS.
"There is no defined regulation to take action on executive directors and managing directors of banks as they are not governed by the common Officers Conduct Rules," he added.
Terming the current procedure to fix responsibility on top executives of government banks as cumbersome, a transparent and effective rule is to be evolved to deal with the complaints against these officials, Venkatachalam said.
Bankers told IANS that there are no service rules for EDs and CMDs other than "terms and conditions".
The "terms and conditions" are nothing but those governing pay and perquisites of CMDs and EDs and do not govern their conduct and the decision-making process while in office.
"Though the loans are sanctioned by a committee, the will of the CMD and EDs prevail at the committee meetings. There is nothing to hold the EDs and CMDs responsible if their actions hurt the bank's name/financial position," a senior bank official in a government owned bank told IANS preferring anonymity.
The only way delinquent EDs and CMDs are brought to book is under the prevention of corruption act, but there should be strong proof against them.
According to Venkatachalam, today, the common feeling is that small loan defaulters are harassed while the big fish escape and enjoy.
"Kingfisher Airline promoter Vijay Mallya is a classic example. Even now, there are reports that he is planning to leave India without repaying the bad dues. His passport should be impounded and he should not be allowed to leave India without settling the defaulted loans," Venkatachalam said.
Incidentally, the National Human Rights Commission (NHRC) on Wednesday said it has sent a notice to the chairman of Central Bank of India for asking him as to why a monetary relief of Rs.100,000 not be recommended for harassing an education loan borrower.
The NHRC said a female student and her father were termed 'defaulters' of education loan and faced insult and harassment at the hands of the Central Bank of India.
This despite the fact that the student had paid back half of the Rs.200,000 loan amount on the first month when the debt repayment fell due.
"In the case of Satyam Computers Ramalinga Raju, facts were hidden in the balance sheet and he was jailed. Can hiding bad loans from the books be seen differently. Can we not say that RBI is also guilty for hiding the actual health of the banks. All such issues cannot be ignored any longer," Venkatachalam remarked.
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article