Move regulators on misconduct by professionals:FinMin

The FM has asked state-owned banks to take up the issue of misconduct by professionals to their regulating bodies like ICAI.

The Finance Ministry has asked state-owned banks and insurance companies to take up the issue of misconduct by professionals like advocates and chartered accountants with their regulating bodies like ICAI.

The ministry has issued the directive to heads of public sector banks,financial institutes and insurance companies on an observation made by Central Vigilance Commission (CVC) which had said sometimes professionals present misleading

reports which lead to distress assets and misleading claims.

“Banks and insurance companies should approach the professional bodies with complaints of professional misconduct for suitable action,” the ministry said.

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The professional bodies mentioned in the communication include,Bar Council of India,ICAI,ICWA and Institute of Engineers.

The CVC had observed that “it has come to light that the professionals empanelled by banksinsurance companies viz advocates,engineersvaluers,chartered accountants,surveyors etc.,are sometimes involved in unfair practices including falsedistorted reports which ultimately lead to distressed assets of the banks or unfair claims settled in insurance companies”.

While fixing up accountability,the maximum that the banks can do is to de-panel such professionals to future assignments.

“Since,decisions taken based on such reports result in huge losses to the organisations,mere de-panelment does not serve as a deterrence to such unscrupulous professions,” the Commission had observed.

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The Ministry has asked the PSBs,FIs and insurance companies to insert an “enabling clause” in the tenure of appointment or engagement of professionals.