<div><em>Reviews progress made with Public Sector Banks’ reform plan Indradhanush </em></div><div> </div><div> </div><div>A high-level meeting, held on Wednesday (21 October) under the chairmanship of the Minister of State for Finance Jayant Sinha, deliberated on the issue of having robust compliance policies and the need to have requisite checks in place to detect any violations, along with strong alarm and signalling systems.<br><br>The top level meeting, which was attended by the Secretary, Department of Financial Services Anjuli Chib Duggal, senior officials from the Ministry of Finance and Chairmen and Managing Directors of various PSBs among others, also discussed the issue of human intervention in compliance related issues was also discussed and it was deliberated as to how to make it completely system driven. Recent raids by agencies like CBI and Enforcement Directorate have brought to light the need for banks implement stricter KYC norms. Banks like Bank of Baroda, Oriental Bank of Commerce were caught napping when investigating agencies unearthed transactions worth crores that were being illegally remitted abroad. These recent investigations have again raised uncomfortable questions about the existence of middlemen and lax vigilance in banks. </div><div> </div><div>The meeting of Sinha with state-run bank bosses comes ahead of the quarterly results of banks (all hues, be it state-run or private banks) which are expected to trickle in over the course of the next fortnight. A big concern within the fraternity is the fresh slippage on account of dud-loans to discoms – estimates put it anywhere between Rs 50,000 to Rs 70,000 crore; it will have a serious impact on state-run banks, especially the weaker among the lot.</div><div> </div><div>The tete-e-tete with bankers this evening was also the first collective one after union finance minister Arun Jaitley announced a seven pronged plan-- Indradhanush--to revamp state-run banks in August.</div><div> </div><div>Indradhanush’s seven elements covered appointments, board of bureau, capitalisation, de-stressing, empowerment, framework of accountability and governance reforms. On the recapitalisation front, thirteen state-run banks were given Rs 20,058 for the current fiscal, plus an additional Rs 5,000 crore on on efficiency parameters. State Bank of India got the highest amount of Rs 5,511 crore followed by Bank of India (Rs 2,455 crore), IDBI Bank (Rs 2,229 crore), Punjab National Bank (Rs 1,732 crore) and Indian Overseas Bank (Rs 2,009 crore).</div><div> </div><div>While it is early days to pass a judgement on the effect of the above measures in the working of these banks, what’s been worrisome are irregularities that’s come to light in Bank of Baroda’s (BoB) foreign exchange operations. The Central Bureau of Investigation (CBI) has searched 50 locations after a sum of more than Rs 6,000 crore was remitted by the bank to Hong Kong toward “imports”. The money was transferred by 59 companies through fresh current accounts at BoB’s Ashok Vihar branch in New Delhi; two officials at the banks have been arrested.</div><div><br><br>(BW Online Bureau)</div><div> </div><div> </div>
