PM Modi calls for strict action against corrupt bankers

Prime Minister Narendra Modi last week called for “strict action” against bank officials who indulge in corruption, frauds or criminal conspiracy, according to the minutes of the meeting of the multi-modal platform PRAGATI (proactive governance and timely implementation), underlining the government’s zero tolerance for any such activity. 

The minutes of the June 27 meeting accessed by ET show that the PM issued these directions after conducting a review of issues regarding the banking sector with the Department of Financial Services (DoFS). 

A few days before this meeting, on June 21, the Indian Banks Association (IBA) had condemned the spate of arrests and charge sheets by investigative agencies in alleged bank fraud cases and at an emergency meeting on June 22 sought setting up of an independent committee and inclusion of a Reserve Bank of India official as part of it to scrutinise charges against the bankers. 

A senior official in the government, speaking on condition of anonymity, however said that the two developments — IBA’s complaints-cum-emergency meeting and the PM’s review meeting — were not linked. 

VG Kannan, IBA’s CEO and a former State Bank of India official had told on June 21that the association had already taken up the matter with the DoFS in Delhi and the Maharashtra government. 

The minutes of the PM’s monthly review meeting on various sectors of the government, held six days later, say, “Strict action should be taken against bank officials/officers involved in misbehaviour/harassment/fraud/criminal conspiracy/corruption etc.” 

The IBA had raised the red flag after Pune Police arrested five Bank of Maharashtra officials, including its CEO Ravindra Marathe, for allegedly colluding with a real estate developer to divert money and cheat shareholders. 

In January, former IDBI chairman Yogesh Agarwal and four executives were arrested in a case linked to fugitive liquor baron Vijay Mallya’s loan default. Several other officials of state-run banks face charges too. 

At the June 27 PRAGATI review meeting, the PM also directed the DoFS to fix a time limit for disposal of insurance claim under its various schemes such as the Pradhan Mantri Jivan Jyoti Bima Yojna and Pradhan Mantri Suraksha Bima Yojna. Nearly 5.4 crore people have enrolled in the first scheme and nearly 14 crore in the latter.