In Banks, one of the major crisis being faced by the junior and middle level officers are the Charge Sheets issued to them for certain alleged lapses, a large number of which they were forced to do on the instructions of their superior bosses, usually  Zonal Head and above ranked, as to resist their pressure is the most difficult for the field staff.   I will come to pressures exerted for extending loans and the state of NPA a bit later on.   First of all I will like to bring to the notice of our readers the comments by Mr G V Subba Ramaiaha on my article relating to pressures exerted on sale of Gold Coins and Insurance Products in last two to three years.   These comments are wonderful in the present context.   He says :

“What is the use of crying now?  Already hands are burnt. Think of a situation where officers were not given good rating because they didn't do well in selling Gold coins and Insurance products. Which has caused them untold embarrassment and humiliation of being denied of satisfactory postings and promotions. In reality these two products alone have broken the backbone of the Banks and destroyed them .

Many foreign joy trips and monetary incentives were gobbled up by short sighted executives who have forgotten their banking business and drove the officers to sell these products exclusively. The result is:

1.These products in a major way are sold to the existing borrowers only by placation. 
2.New borrowers were made to subscribe to the insurance products as an inbuilt condition only.

The borrowers understood the psyche of the Bank officers and they did capitalize on the Bank officers thrust. The result is many accounts have gone NPA but the officers and the executives reaped the incentives”

Now when GoI has banned the sale of Gold, can CMD or ED reverse the embarrassment and humiliation put on honest officers due to their policies which have in the long run been proved to be damaging to the Indian economy / nation as a whole ?  Has any CMD or ED given any award to honest officers who honestly implemented KYC norms and did not indulge into sale of third party products to people with black money and high risk profile and saved the bank from further penalties ?  I am sure, not even a single CMD or ED has guts to admit their mistakes on promoting sale of gold coins or insurance products without adhering to KYC norms.

My mind stops working when I try to probe as to whether our CMDs and EDs en masse are so dumb that none of them could visualize the problems that can be faced by India on the current account deficit due to mass level encouragement of sale of gold?    Is each one of them is  such a big fools that none of them could feel that KYC norms are being flouted under their very nose, and finally on the expose of Cobrapost,  RBI had to slap almost each one of them with penalty running in crores?    Why RBI and MoF are silent on this incompetence of bank chiefs.    What has gone wrong with their selection of CMDs and EDs that has led to a situation where non of them is competent enough to see through such lapses at such a mass and national level?  I will call this the biggest failure of MoF / RBI in chosing such dumb people to head PS Banks.   If  an ordinary banker like me could see through these and write in my columns about such dangers, I am 100%,sure that we have much much more intelligent people, who should have adored such posts,  This has  happen only due to the fact that almost all the top posts in Banks are filled up not based on merit but corruption and nepotism (Exposure of Railway Minister is before all of us)

Now back to our main issue of today i.e. Should their be Command Responsibility for CMDs and EDs.  Yes, there is an urgent need for bring such a responsibility.  Baring the cases where there is charge sheet due to lapses in documentation, lapses in the valuation of property etc, (which can be directly attributed to the concerned person’s negligence), in all other cases the commander (ie the sanctioning authority) must always be held equally responsible for the lapses in sanction if such accounts become NPA. 

I am sure, a large number of officers may not agree with my views which I am going to give below as they are too  much radical in nature.   However, at present banking is passing through critical phase, where NPA is going out of control, moral of the lower level officers is down,  CMDs, EDs are sitting pretty and are almost untouchable for CVC and CBI.   In such a situation some radical changes are required to bring the system to streamline, which may not be of liking to certain class of officers.    Such officers can certainly put their views in the comments column so that we have a fair view about what is desired by the general banker.

The charge sheets for Loans sanctioned above the level of Zonal Manager must start only at the level of Zonal Manager and no one below him should be charge sheeted except in cases where the lower functionary has supplied some wrong information / certificate relating to the facts in the Appraisal Note.   The buck should not be allowed to pass to the Scale I / Scale II / Scale III officers at the branch level.   Let their be stricter appraisal of loans sanctioned at Zonal or above level.   For the lapses in  sanctions of Board Level, the charge sheet should start not below the level of General Manager.  

The delay in curbing the sale of gold, ignoring corruption cases has resulted in crisis of Current Account Deficit, and now if  MoF and RBI fail to bring into focus the Command Responsibility concept, soon will find that there is crisis of Financial Sector, specially Banking Sector.   Let GoI be awaken so that Crisis of Morality does not deepen further.