FM Sitharaman tells bankers not to fear 3Cs

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NEW DELHI: Keen to boost the confidence of bankers and push loan approvals, finance minister Nirmala Sitharaman on Saturday said that the government and investigative agencies have agreed to initiate measures to address concerns of executives, many of whom were worried over genuine decisions being questioned by the three Cs namely the Central Bureau of Investigation, the Central Vigilance Commission, and the Comptroller and Auditor General.
“Banks have gone through a slightly worrying period wherein decision-making was getting difficult because of fear of the 3C. There was concern that bona fide decisions are not being made by banks because of what they would say undue harassment, uncalled-for harassment that happens because of these agencies pursuing cases,” Sitharaman said after a meeting with bankers where CBI director R K Shukla was also present, the first such instance in nearly two decades.
The CBI director’s presence at the finance minister’s review meeting with bank chiefs indicates the government’s keenness to address a concern at a time when the industry is also talking about the fear of investigative agencies.
A series of steps have been taken, including a dedicated number on which information about any undue harassment by the investigative machinery can be reported. A distinction would be made between genuine commercial failures and culpability.
Further, the CBI will only serve notices and summons that are computer-generated. The sluggish credit uptake has been a source of worry for the government as it seeks to speed up growth, with bankers wary of lending for the fear of their decisions being subjected to scrutiny.
The Modi government’s two spells have seen the CBI zealously pursing cases of collusion between allegedly corrupt businessmen and their “collaborators” in banks. Sitharaman said a similar exercise will be done with Enforcement Directorate, the Directorate of Revenue Intelligence and customs to allay fears.
Separately, steps are also being initiated to ensure that forensic auditors who are appointed by lenders do not harass borrowers as there have been complaints that some unscrupulous elements have tried to extort money.
Banks were advised to ensure rigour and adherence to objective standards in the selection of forensic auditors and devising objective standard operating procedures for carrying out of forensic audits.
While the CBI is planning workshops with bankers, bank chiefs were also instructed to clear long-pending vigilance cases against their officials for alleged malpractices. The banks have been asked to set up a committee headed by general managers which will either decide to pursue the cases or close them.
A finance ministry statement said that banks would soon be able to report instances of fraud through e-filing of FIRs on a designated email address of the CBI.