Finance Minister Sitharaman on Saturday asked banks to lend without any fear from CBI and other agencies popularly termed as 'three Cs'. She stated that prudent commercial decisions would be protected helping banks to make decisions as per their wisdom.
The 'three Cs' are -- Central Bureau of Investigation (CBI), Comptroller and Auditor General of India (CAG), and Central Vigilance Commission (CVC).
Sitharaman was holding a review meeting of the banking sector with Chairman and Managing Directors of Public Sector Banks (PSBs) in the national capital. Rajeev Kumar, Finance Secretary, Atanu Chakraborty, Secretary, DEA and AB Pandey, Revenue Secretary, were also present in the meeting.
In the meeting, Sitharaman said in the past there had been worries and concerns among bankers about investigating agencies, which impacted bonafide decisions.
Sitharaman, after meeting, said, "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 which the CBI takes against the bank. So, let's be very clear in the understanding that banks have an internal committee, which look at fraudulent practices in certain accounts or certain cases and they have well-defined protocol for it."
She added, "When banks' internal committee decide only then it goes for information to the Reserve Bank. Post that it gets referred to the CBI. And these are for Rs 3 crore or more suspicious fraudulent cases."
In the meeting with CMDs of PSBs, it was decided that:
- The CBI would develop a mechanism as recently introduced for the I-T notices so that CBI notices carry a registration number to avoid any scope for unauthorised communication and consequent harassment.
- While pursuing criminal action against those responsible, the agency shall be sensitive to the distinction between genuine commercial failures and culpability. It was also noted that there is a need for preserving the value of the business enterprise by treating it on a separate footing from the culpability of individuals if any.
- PSBs may report instances of fraud through e-filing of FIRs on a designated email address of CBI to avoid the scope of any arbitrage due to information asymmetry.
- CBI would create a dedicated phone number on which any person could give information regarding any undue harassment by the investigative machinery.
The Finance Minister requested the Indian Banks' Association (IBA) to:
- Strengthen the forensic auditor empanelment process.
- Place robust arrangements for assessing adherence to standards by forensic auditors.
- Tie-up with CBI for training forensic auditors.
Finance Ministry statement said, "It was also noted that there is a need for preserving the value of the business enterprise by treating it on a separate footing from culpability of individuals, if any."
Additionally, the CBI, along with the top bank officials, will hold meetings and workshops in the next few months to explain confusions and misgivings.
(With inputs from PIB report)
(Edited by Vivek Dubey)