Finance Ministry asks banks, insurers to move regulators on misconduct by professionals
MDT/PTI 21 August 2012

According to CVC, professionals empanelled by banks and insurance companies like advocates, engineers or valuers, chartered accountants and surveyors are sometimes involved in unfair practices including false or distorted reports which lead to distressed assets of the banks or unfair claims settled in insurance companies

New Delhi: The Finance Ministry has asked state-owned banks and insurance companies to take up the issue of misconduct by professionals like advocates and chartered accountants with their regulating bodies like Institute of Chartered Accountants of India (ICAI) or Bar Council of India (BCI), reports PTI.


The ministry has issued the directive to heads of public sector banks, financial institutes and insurance companies on an observation made by Central Vigilance Commission (CVC) which had said sometimes professionals present misleading reports which lead to distress assets and misleading claims.


"Banks and insurance companies should approach the professional bodies with complaints of professional misconduct ...for suitable action," the ministry said.


The professional bodies mentioned in the communication include, Bar Council of India, ICAI, Institute of Cost and Works Accountants (ICWA) and Institute of Engineers.


The CVC had observed that "it has come to light that the professionals empanelled by banks\insurance companies viz advocates, engineers\valuers, chartered accountants, surveyors etc., are sometimes involved in unfair practices including false\distorted reports which ultimately lead to distressed assets of the banks or unfair claims settled in insurance companies".


While fixing up accountability, the maximum that the banks can do is to de-panel such professionals to future assignments.


"Since, decisions taken based on such reports result in huge losses to the organisations, mere de-panelment does not serve as deterrence to such unscrupulous professions," the Commission had observed.


The Ministry has asked the public sector banks (PSBs), financial institutions (FIs) and insurance companies to insert an "enabling clause" in the tenure of appointment or engagement of professionals.

Free Helpline
Legal Credit