In the absence of strong legal provisions, top bank officials are allowed to go unchallenged even as murky dealings and irregularities surface. Is the present system really so hapless in nabbing the white-collar culprits, or is it a case of conveniently sweeping the dirt under the carpet?
Openly flouting established guidelines, indulging in favouritism in awarding promotions and contracts, even accepting bribes for sanctioning big-ticket loans... these are just some of the irregularities that have emerged of late, with top honchos of some banks involved in a big way. Although this murky picture has come to the fore only recently, these practices have been going on for some time. The shocking fact is that the government appears ill-equipped to deal with this menace, allowing top honchos of banks and other institutions to run free. The reason for this ineptitude, sources tell us, is the alarming absence of a robust legal framework to nab the wrongdoers.
In an environment where ethics appear to have taken a backseat, it is bewildering to know that very little can be done to arrest this problem. The shocking instance of the Centre's inability to initiate proceedings against former Central Bank of India chairman and managing director H D Daruwala, accused of violating several guidelines, is indicative of the rot in the system.
Although the charges levelled against Ms Daruwala by a whistle-blower have been proved, she is hardly breaking any sweat, having since retired from her post. Apparently, the case was beyond the ambit of the finance ministry, as current provisions do not provide for disciplinary proceedings against CMDs of nationalised banks. Ms Daruwala only earned a mere displeasure note from the ministry for all her shenanigans, according to a report in The Times of India.
A communication from the ministry of finance (vigilance division), which Moneylife has access to, clearly states, "These provisions do not have any provision for initiation of disciplinary proceedings against CMDs and EDs, who are Presidential appointees, except removal from the service of the bank after following due procedure. In case an officer is found guilty of any misconduct and in the meantime he retires from the Board, Department has no option but to issue a 'displeasure' which may not serve any purpose." This has clearly exposed a gaping hole in the legal system as it stands today.
The case with the Central Bank of India CMD is not a one-off; there have been several other instances where bank heads have committed white-collar crimes, only to be let off without as much as a rap on the knuckles. Another top official from Punjab National Bank was also served a displeasure note for certain misdeeds, sources have informed us. But the real question here is, whether this is actually an inability stemming from a lack of legal recourse or a deliberate attempt to hide deep-rooted corruption from the public?
The ministry is apparently in the process of framing new rules and regulations that would be applicable to full-time board level appointees in all public sector enterprises. It is only now that the Centre is waking up to the increasing instances of irregularities in the top institutions of the country and trying to come up with tougher laws against corrupt officers. Even then, it is alarming how the rot has been allowed to take root. How is it that no legal action can be initiated against such high-ranking officials, who are dealing with public money every day?
Commenting on the existing legal provisions, Subhash Sawant, general secretary, Indian National Bank Employees' Federation said, "The present system allows corrupt high-level bank officials to go scot-free. There is absolutely nothing that can bring them to book. Up to the level of general manager, the particular bank's service regulations come into force, where provisions for disciplinary action are available. However, positions of CMD and executive director do not fall under these rules, as they are appointed by the president of India. Even if investigations are carried out, these officials escape during court proceedings, due to lacunae in the regulations. It is my firm opinion that these people be brought under the purview of some law."
Dr Anil K Khandelwal, former chairman, Bank of Baroda, confirmed that current provisions do not permit any action against the CMD. However, if a Central Bureau of Investigation (CBI) inquiry leads to a prosecution, then the court can hand out a punishment at its discretion. It was under these circumstances that former chairmen of UCO Bank and Indian Bank were booked several years ago.
CH Venkatachalam, general secretary, All India Bank Employees' Association, believes that more transparency is needed. "The chairman and executive directors are equally employees and pubic servants. If any guilt has been proved against them, there must be tougher provisions to prosecute them. These people are dealing with huge sums of money and are drawing salaries, at the same time taking money through some underhanded means. It is important that such high positions of power be made more transparent," he said.
The country's second largest two-wheeler maker Bajaj Auto Ltd (BAL) today reported 19% jump in motorcycle sales at 2,65,036 units in November.
The company had sold 2,42,390 units in November last year, BAL said in a statement.
In October this year, the company had reported its highest ever motorcycle sales in a month at 3,29,776 units.
BAL's exports dipped 8% during November at 90,869 units as compared to 98,521 units in the same month last year.
"Exports were affected due to logistics constraints," the company said in the statement.
In the three-wheeler category, BAL reported flat growth during November at 34,195 units as compared to 34,111 units.
On Thursday, BAL ended 0.23% down at Rs1,566.20 on the Bombay Stock Exchange, while the benchmark Sensex closed 0.72% up at 19,992.70 points.
Kolkata-based Dhunseri Petrochem and Tea Ltd said it has acquired the tea factory of Primax Tea Pvt Ltd. No financial details were provided.
"The company has purchased and taken possession of the tea factory of Primax Tea Pvt Ltd as per the agreement executed with them," the company said in a filing to the Bombay Stock Exchange (BSE).
The new factory's capacity will be expanded to 16 lakh kg per annum during winter from the existing 10 lakh kg per annum, it said.
On Thursday, Dhunseri Petrochem increased 1.53% to Rs212.95 on the BSE, while the benchmark Sensex closed 0.72% up at 19,992.70 points.