Stricter rules on cards for professionals hired by banks

To keep a tab on professionals indulging in fraud or misreporting of facts,the department of financial services has directed public sector banks

Written by Ritu Kant Ojha | New Delhi | Published: July 2, 2012 12:19 am

To keep a tab on professionals indulging in fraud or misreporting of facts,the department of financial services (DFS) has directed public sector banks to work on a common platform where information about professionals hired as advisors for various services,can be shared.

Banks at their zonal or regional level routinely hire lawyers,company secretaries and chartered accountants for specialised services through a process of empanelment. The Central Vigilance Commission had recently raised concerns over the due diligence process adopted by the banks before using services of such professionals.

“The matter was raised during the vigilance week a few days back,stressing on checking the background of such professionals,” said a senior finance ministry official. There have been cases in the past wherein they acted against a bank’s interest and deliberately provided wrong information to favour the other party,an official said.

“To make sure such people do not fool other banks,we are contemplating a system wherein a complaint will be filed with the respective regulatory bodies such as the Bar Council,the Institute of Chartered Accountants of India and the Institute of Company Secretaries so that the license of such professionals can be cancelled,” said a finance ministry official.

The finance ministry has asked the Indian Banks’ Association (IBA) to bring out a guideline under which banks would circulate the names of erring professionals among all banks to prevent their empanelment in the future.

“The issue will be taken up by the boards of respective banks and if they are convinced about somebody’s wrongdoing,it will be passed on to the us and we will circulate it to all the banks,” K Ramakrishnan,CEO,IBA said.

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