PSU banks director nominees may face intelligence bureau scrutiny-Economic times
NEW DELHI: The Intelligence Bureau may be asked to check the antecedents of candidates before they are appointed as directors of public sector banks as part of a government drive to check non-commercial consideration in credit disbursement.
The move comes in the backdrop of allegations that former railway minister PK Bansal's kin Sunil Gupta, a shareholder director in Canara Bank, helped one of the companies owned by the minister's son secure loans from the same bank. Bansal has since resigned.
"Going forward, we may seek inputs from IB as well so that any such matter is placed on record before final selection," a government official told ET.
Further, companies seeking loans from state-run banks will have to declare if any of the directors on the bank board also represent their company in some capacity, so that the bank can follow stricter due diligence, the official said.
A similar declaration can be sought from all chartered accounts on board of state-run banks. "This can only be the mechanism to curb the menace, otherwise all board officials will have the alibi that the loan was sanctioned at the branch level and not managing committee," the official said.
Most of the concern relates to the appointment of part-time, non-official directors and shareholder directors.
The current norms say graduate in the age group of 40 to 60 with special academic training or practical experience in the fields of agriculture, rural economy, banking cooperation, economics, business management, HR, finance, law, marketing, industry and IT can be appointed part-time, non-official directors. State-run banks have around six non-official directors, two part-time non-official directors, one part-time non official director who is a chartered accountant and three shareholder directors.
The part-time, non-official directors are appointed by the finance ministry after clearance from the enforcement directorate and other tax authorities to check if the selected candidates have any cases against them.
The ministry receives as many as 60-70 applications every week for appointment as a director on the board of public sector banks and most are backed by politicians.
Sunil Gupta, the shareholder director in Canara Bank, had also told ET that the decisions were taken by the bank's local office and did not come to the board.
Gupta had further argued that Bansi Raunaq Energy Ltd, a company owned by the railway minister's son, was a defunct company and hence there was no conflict of interest. As per current RBI guidelines, a director on the bank's board has to disclose if he holds any similar position in any other entity, his membership in any corporate bodies and his interests as a partner or proprietor of firms.
But political cronies appointed on bank boards can influence the bank to lend to companies of their benefactors where do not hold any official position.
As reported by ET, Amit Bansal's Theon Pharmaceuticals and ISIS Packaging have collectively taken loans amounting to more than 10 crore from Canara Bank. Gupta is also the auditor of these two firms.
A chairman with a state run bank, however, said that unless the selection process is delinked from the government, such instances would not be curbed.
"The RBI and banks, independently should be selecting all non-official directors. Minimal government inference will ensure that there is no political pressure," he said
Selection Of ED And CMD of Public Sector Bank
Frivolous complaints bog down selection of public sector banks chairmen
collected from Economic times
NEW DELHI: The task of appointing chairmen of state-run banks is proving to be a challenge for the government, with its vigilance machinery getting bogged down in a myriad of corruption charges against selected candidates.
Read full report by clicking on following links
Many Bansal Titled Persons Are NOW At Various Key Posts--This Happens In India Only---Promotion depends On Flattery AND Bribery to A Great Extent
Enquire role of Bansal in promoting Mahesh Kumar as Railway board member, demand activists
click on following link to read more
http://importantbankingnews.blogspot.in/2013/05/many-bansal-titled-persons-are-pciked.html
Minister Appoints His Man As Director of Bank
Personal auditor of family companies of Minister Mr. Bansal elevated to the post of director. This is not astonishing in Indian context. Most of directors, Executive directors and Chairman and Managing directors are appointed on the basis of their closeness with Ministry of Finance or RBI top brass or Ministry of other departments who holds good relation with MOF and RBI. It is not easy to expose the underhand dealing (bribe in cash or in kind) in all such appointments.
Bansal has appointed his relatives, friends and close associates or promoted them or directly or indirectly motivated competent authority for appointment or promotion of existing officials based on recommendations of his or his relatives and it is not a new phenomenon.
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