The Finance Ministry has directed public sector banks and financial institutions, such as insurance companies, to promptly report vigilance-related matters concerning whole-time Directors on their boards.
The directive from the Finance Ministry’s Department of Financial Services (DFS) states that omission of any significant information relevant for decisions relating to appointments, promotions, board-level postings, and placement of whole-time Directors is a matter of serious concern and strict compliance in such matters is expected from all public sector undertakings (PSUs).
The order comes in the wake of several instances of information about board-level appointees not being reported in time. The directive points out that in many cases, such critical adverse inputs like private complaints, court observations, references or inputs from the CBI or other law enforcement agencies are being reported only when vigilance clearance is specifically sought from the Chief Vigilance Officers (CVO) of PSUs at the time of promotion or appointment.
The advisory issued this month points out that in certain cases, even crucial information relating to while-time Directors is omitted in the vigilance clearance formats on the ground that no specific column exists for such disclosure.
The DFS has directed public sector banks and financial institutions to immediately report adverse inputs regarding board-level officials, even though the alleged lapse pertains to any other capacity other than the board.
It has also asked them for submission of comprehensive disclosures in vigilance clearance, which would include observations or directions of courts or tribunals, internal committee findings, audit observations of a serious nature and communications from any department or agency.
CVOs must ensure that the vigilance clearance reflects the most updated and accurate status as on date of issuance and that no material should be suppressed, it added.
Earlier this year, the government had to reverse its decision on the promotion of Union Bank of India Executive Director (ED) Pankaj Dwivedi to General Manager of Punjab & Sind Bank, as vigilance clearance had not been provided in the case.
The Centre’s decision was taken due to an ongoing case in the Delhi High Court in which it was alleged that his appointment as Executive Director of Union Bank of India violated norms, as there was no vigilance clearance.
