 "Banks form special panel to address corruption cases, guard executives")
Banks have established a panel led by former Central Bureau of Investigation (CBI) special director DC Jain to devise strategies and frameworks for effectively handling cases involving lenders under the Prevention of Corruption Act, according to a report by the Economic Times (ET). The Indian Banks Association (IBA) confirmed this with ET, stating that the panel would delve into various related issues but refrained from providing further details.
The establishment of this committee comes against the backdrop of recent instances involving senior banking officials facing legal scrutiny -- former SBI Chairman Pratip Chaudhuri's arrest in a loan scam case in 2021, followed by the Bombay High Court's critique of the CBI's arrest of former ICICI Bank MD Chanda Kochhar in a loan fraud case.
Banks have been advocating for additional safeguards under Section 17A of the Prevention of Corruption Act. This is similar to the immunity currently given to top officials of the National Bank for Financing Infrastructure and Development (NaBFID).
Under Section 17A, prior authorisation is needed to initiate any investigation into alleged offences committed by public servants in the course of their official duties.
In line with established procedures outlined for cases under Section 17A, any police inquiry into decisions made by public servants during their official duties necessitates prior approval from competent authorities.
The committee will be responsible for examining diverse facets related to the Prevention of Corruption Act. This reflects banks' efforts to address concerns surrounding arbitrary arrest or actions by investigating agencies against senior bank executives for making commercial decisions, such as loan disbursements.
Following preliminary discussions with the government, the formation of the Jain committee will take on a collaborative approach to tackle pertinent issues within the banking sector. The committee will include representatives from three state-run banks, including the largest bank in the country, State Bank of India (SBI).