The Department of Financial Services (DFS), under the Finance Ministry, in its order dated October 29, has advised adoption of comprehensive guidelines on ‘Employee Accountability Framework for NPA accounts up to Rs 50 crore’ by all public sector banks (PSBs). . (other than in cases of fraud)”, Indian Banks’ Association (IBA) said in a statement. It said that banks have been advised to revise their staff accountability policies based on these comprehensive guidelines and formulate procedures with the approval of the respective boards.
IBA, being a major stakeholder of the framework, was involved in the process from the very beginning. These guidelines will help allay the apprehension that bankers may be framed for their genuine commercial judgment to be wrong. This will help the banker to take faster loan decisions and help in supporting the economy.
Emphasizing that the new guidelines will certainly boost the morale of the employees of public sector banks, it said that the banks should complete the exercise of accountability of employees within six months from the date of classifying the account as NPA. Will happen. Further, it is stated that depending on the size of the business of the banks, the threshold limit for checking accountability has been advised by the Chief Vigilance Officer (Chief Vigilance Officer) It added that due weightage will also be given to the past track record of the officers in evaluation or sanction/monitoring. “At present, different banks are following different procedures for carrying out employee accountability exercise. Along with this, the accountability of the employees is being fixed in respect of all the accounts becoming NPA.
“This approach not only adversely affects the morale of the employees but also puts a huge strain on the resources of the bank,” it said. While there is a need to take punitive action against officials with malicious intent/involvement, it is necessary to ensure that genuine wrongdoings are dealt with compassionately, the IBA said. It added that in this competitive environment there is a need to protect the people making the actual business decisions.
Further, the IBA said that at a time when the country needs an economic boost, the slow credit disbursement to industries fearing implications is a matter of concern and needs immediate resolution. Banks may, with the approval of their Board, fix a limit of Rs 10 lakh or Rs 20 lakh depending on the size of their business to need to examine the aspect of accountability of employees.