PSBs told to revise staff accountability policies for NPAs
The new guidelines – Staff Accountability Framework for NPA Accounts up to ₹50 crore (Other than Fraud Cases) – are aimed to protect the commercial decisions taken by bank employees and quicker resolution of vigilance cases taking into account the past track record of such staff.
With the approval of their Boards, lenders may decide on a threshold of ₹10 lakh or ₹20 lakh, depending on their business size, to examine all aspects of staff accountability.
“Banks have been advised to revise their staff accountability policies based on these broad guidelines and frame the procedures with approval of the respective boards,” the Indian Banks Association said in a statement.
The guidelines will be implemented from April 2022 for accounts turning bad on or after April 1 of that year.
IBA said currently banks were following various procedures for conducting staff accountability.
“Also, staff accountability exercise is being carried out in respect of all accounts which turn NPA. This approach not only adversely affects staff morale but also puts a huge strain on the Bank’s resources,” it said.
While punitive action needs to be taken against officers who have mala fide intent, it was essential to ensure that bona fide mistakes are dealt with compassion, the bankers’ association said. “There is a need to protect the people taking bona fide business decisions in this competitive environment,” it said. At a time when the country needs an economic boost, slow credit delivery to industries due to fear of being implicated is a matter of concern and needs to be addressed urgently, it added.