FinMin asks PSU banks to end disciplinary cases fast

Saikat Das
moneycontrol.com

Underscoring the need of fast-paced decision making in all state-owned banks, the finance ministry (FinMin) has issued a circular to all lenders to end the lingering process of disciplinary actions against bank employees. Under the new directives, a banking authority has to institute any inquiry within 15 days while the report has to be finalized in three months with an option of three extensions of one month each.

Earlier, the entire process of completing any disciplinary formalities could stretch from one to four years.

"Disciplinary action is like a hanging sword on your head," an executive director of a large Mumbai-based large public sector bank told moneycontrol.com on condition of anonymity.

"Till the final decision comes out, the charge-sheeted official cannot concentrate on anything. A delay in decision not only affects his career but the concerned bank too suffers due to low productivity leading to his stalled decision making ability. Moreover, any mala fide intention of the accused can hamper bank's operation further in an extended stay," he said.

The way to move for disciplinary actions...

There is an internal process to take disciplinary action in case any bank employee upto grade-four (the level below assistant general manger). Firstly, The supervising official first have to report to the bank's chief vigilance officer (CVO), who will study the case and seek comments to determine the nature of the case (mala fide intention or other). Later, CVO will take the final call with an approval from the bank's chairman and managing director (CMD).

It is then, the banking disciplinary authority to set up an inquiry committee by appointing inquiry officer, presenting officer (on behalf of the bank). The accused employee too can have his representative (not an advocate) to defend his counterpoints.

"The dillydallying process of PSU banks must end. Punish the office, if he is guilty or exonerate him from charges. The FinMin move will no doubt improve productivity of bank officials as the resultant tension out of such cases is going to be short-lived," said a general manager from a mid size Mumbai-based bank.

Hurting a banker's career and growth path as well...

Penalties against disciplinary actions can be of two types: major or minor. In case of minor, the accused is generally left with a caution. However, it can hurt a banker's career in hindsight.

A classic example: an AGM from a New Delhi-based bank was charge-sheeted two years back. Meanwhile, he appeared for an interview for promotion to deputy general manager’s post. But his results remained sealed in absence of final settlement of the pending case. He was just exonerated (from his charges) after two years and later he found, he had passed the interview for DGM's post. Accordingly, the bank has just promoted him with due seniority.

A faster disciplinary process could have saved his embarrassment of two years without delaying promotion of a newly selected candidate.

Also read: Boost saving deposits, grow retail loans 30%: Govt to banks

The secretary of financial services, D K Mittal, as many believe, has to be credited for these guidelines. In the last one year since his appointment, he has brought in some positive changes related to human resources policies and other operational areas.

saikat.das@network18online.com