The advisory follows ET’s November 29 report that Ashwani Kumar, MD & CEO, UCO Bank, continues to remain in office despite the Central Bureau of Investigation (CBI) filing a chargesheet involving him. The CBI chargesheet alleged violations of lending norms in the Lal Sons Jewellers case during his previous role at the Oriental Bank of Commerce (OBC). OBC has since merged into Punjab National Bank.
A CBI special court directed Kumar on November 11 to furnish a ₹50,000 bond and barred him from leaving the country or influencing witnesses in the OBC lending case.
The CBI cited lack of cooperation from OBC and the lender’s refusal to grant mandatory approval for prosecution as reasons for not arresting him during the probe.
“All relevant material, including observations or directions of courts/tribunals, internal committee findings, audit observations of a serious nature, and communications from any department or agency, in respect of WTDs must be disclosed while furnishing the vigilance clearance,” said the finance ministry letter dated December 5 and reviewed by ET.
The department of financial services (DFS) said complaints, court observations, and references from agencies such as the CBI, including approvals under Sections 17A and 19 of the Prevention of Corruption Act (PCA), must be promptly shared with the ministry, regardless of when the lapse occurred.
While Section 17A deals with the approval given to a police officer to investigate a crime for the breach of the PCA, Section 19 deals with mandatory sanction required for prosecution from the Centre, state, or the relevant authority that controls the employment of the officer under the lens for PCA breaches. Latest Records
Banks have also been told to ensure comprehensive disclosure and maintain updated vigilance clearance status to avoid incorrect approvals at the highest level of decision-making.
In 2024, the finance ministry, after a meeting with investigating agencies, had agreed to create more platforms for regular discussions between bankers and the CBI.
Under existing guidelines, in vigilance cases beyond six months, banks need to mandatorily submit a statement every quarter to the finance ministry in addition to submitting such reports to their respective board.
In 2021, the Advisory Board for Banking and Financial Frauds (ABBFF), was set up, which examines the role of all levels of officials, WTD (including ex-officials / ex-WTDs) in PSU banks, insurance companies and PSU financial institutions, in case of frauds amounting to ₹3 crore and above.
Financial institutions must refer the cases for advice to the ABBFF before the initiation of a criminal probe, and the authorities concerned must consider the advice of ABBFF regarding the involvement of criminality or malfeasance by the officials. “The Central Vigilance Commission or Central Bureau of Investigation may also refer any case or technical matter to the board for its advice,” showed the ABBFF referral guidelines.
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