The Finance Ministry has roped in the Central Bureau of Investigation (CBI) to allay the concerns of the banking industry about investigating agencies impacting the bonafide decisions taken by the banks.
CBI Director RK Shukla will hold regular meetings with top bank officials to assure them that prudent commercial decision-making would be protected and ensure them (banks) no uncalled for badgering by the probe agencies.
Following the PNB bank fraud by fugitive diamantaire Nirav Modi that rocked the nation and the banking system, no major decisions have been taken by the banks fearing harassment by the investigating authorities.
"After the Nirav Modi scandal came to fore, bankers across the country feared taking decisions and as a result, no major decisions took place in the recent past. The CBI director has been roped in to calm the bankers," Sources within the finance ministry told India Today TV.
Henceforth, no banking case will go the CBI directly until banks seek its intervention. The (finance) ministry has also asked the banks to set up an internal vigilance committee led by the General Manager (GM) (at bank-level) to look at the frauds committed by their employees and assess whether the existing cases merit an investigation apart from their internal risk management team.
The vigilance committee will now look at frauds worth Rs 3 crore and more. The (finance) ministry has also asked the banks to take swift departmental action on complaints.
To further boost the bankers' confidence, Finance Minister Nirmala Sitharaman will hold meetings with The Enforcement Directorate (ED) director and the Central Bureau of Direct Taxes (CBDT) chairman in the coming days to make sure bankers don't get harassed unnecessarily.
Sitharaman had on Saturday (December 28) said that the bank officials feared uncalled for harassment but "now there was no reason to feel so".
"No case, no case whatsoever, involving the banks goes to CBI without the banks themselves deciding to send it here. There is no suo moto case that the CBI takes against the bank. So, let's be very clear in the understanding that banks have an internal committee, which looks at fraudulent practices in certain accounts or certain cases and they have a well-defined protocol for it," the Finance Minister said at a meeting with the CEOs of the public sector banks.