Central Vigilance Commission
Minutes of the Annual Zonal Review
Meeting with the CVOs held on 22nd January 2009 at Chennai.
The list of participants is at Annexure-A.
2. CVC
in the Chair. The meeting started with welcome
address by the CMD, Indian Bank and introductory remarks by CVC and the
Vigilance Commissioners. This was
followed by presentations by CTEs on the inadequacies observed in the CTE
examination of the works and procurement contract of the organizations present
in the meeting. Copy of the CTE
presentation is at Annexure-B. This was followed by presentation from
the participating organizations on the agenda items (Annexure-C). During the
presentation by participating organizations, the Commission intervened and made
some observations. Such of those
observations needing follow up action are indicated in the minutes later.
3. Welcome Address:
3.1 Shri
Sundararajan, CMD, Indian Bank welcomed the Commission and the participating
organizations. He referred to the
resilience displayed by the Indian public institutions and emphasized the need
for probity and accountability of the people at the helm of affairs within the
overall framework of corporate governance.
He underlined the need to reduce malafide action and some minimum
standard and benchmarks to be set and the role of preventive vigilance is
important in all these. He praised the
role of CVC in serving as active radar preventing untoward happenings rather
than as an organization that comes in the way of positive action.
4. Introductory Remarks:
4.1. CVC:
i)
The annual meeting with
the CVOs of the Banks is important in view of the role played by the Banks in
the commercial world, the satisfactory vigilance administration in the banks in
a comparative sense and the fact that Banks reflect the status and health of
the economy and the general economic administration;
ii)
The relatively better
position of the Indian banks is praise-worthy and some of it would reflect on
the effectiveness of the watchdog bodies.
iii)
However, the recent
vigilance audit of some of the banks has revealed the recurrence of some of the
ills of the past;
iv)
CVC requested the
participants to strictly go by the agenda items sequentially and highlighted
the following issues:
a)
The status of
implementation of the Commission’s guidelines on leveraging of technology. The performance of the insurance companies
in this regard is extremely tardy and therefore the Commission would not
hesitate to deny vigilance clearance for th in the senior management responsible for it,if things continue at this
pace;
b)
The effectiveness of
external audit and the need for greater supervision and attention to detail;
c)
The disturbing trend
noticed recently in terms of delays leading to recommendation of punishment
closer to retirement or reduced punishment.
It is also seen that things are kept pending till the employee got
promoted;
d)
As no major misconduct
can take place with the involvement of a single individual, the banks need to
be more alive to the need for identification of supervisory failure and shun
the tendency to shield the senior officials;
e)
The reports on
disciplinary cases, though well structured and detailed, have scope still for
improvement. It is expected of the CVOs
to bring value addition in these reports.
5. VC(R)
i)
The monthly report needs to be used as a
real communication tool and not treated as a mundane exercise. CVOs should bring before the Commission
issues and pendency with details of where and why things are pending and report
on the efforts to address the pendency;
ii)
On preventive vigilance
there is need to build cases and spread the message widely in the organization;
iii)
The vigilance audit
conducted by the Commission has revealed that the CVOs do not receive all the
complaints. The CVOs are advised to go
through all complaints to look for vigilance angle. They should pay more attention to quick mortality account and
discounting of bills;
iv)
CVOs should examine
whether information was properly shared in consortium lending by going through
the minutes of consortium meetings;
v)
For creation of
mortgage, the Bank officer is supposed to accompany the lawyer as per laid down
instructions. This should be enforced
and checked. There is also need to
prepare the valuers list with greater care and initiate action for failure on
the part of the valuer as and when noticed;
vi)
As regards internal
audit, the CVOs should have access to papers.
CVOs should go through instances where there is a spurt in advances and
examine the role of the controlling office;
vii)
The CVOs should
remember that the track record of an officer is not of much use in the face of
proven malafide;
viii)
There should be no
delay in acting on Commission’s advice unless there are no reasons to ask for a
review/reconsideration based on additional and new facts. While requesting for first stage advice, it
is necessary to scrutinize the quality of charge sheets. It is also important later, to exercise good
choice for appointment of IOs having regard to operational experience, flair
for the work, reputation, fairness and transparency;
ix)
There should be a
programme for IT audit;
x)
The CVOs should make
their contribution effectively in the internal advisory committee meetings.
xi)
With regard to the take
over accounts it should be questioned and examined where the party was meeting
his banking requirements till now.
(6)VC(S):
i)
Though things are okay with the banking
sector at the moment, it cannot be denied there should be in place preventive
strategies to anticipate and prepare for any likely adverse fallouts;
ii)
As regards IT
application, the vigilance capability should be enhanced to examine the
vulnerability of the system. To achieve
this, a preventive monitoring of areas of concern should be put in place as has
been done in some PSUs;
iii)
While shielding the
guilty is not to be tolerated, implication of innocent people as an extra safe
measure should always be avoided.
7.
Presentation by the participants:
7.1.
Leveraging of Technology:
Most of the banks are well advanced
and would have systems in place by April 2009, whereas, in the case of
Insurance Companies, the implementation is lagging behind as most of them would
complete the exercise only by the last quarter of 2009. In Oriental Insurance Company, the system
would be ready by March 2009 and LIC reported full compliance except online
status of receipt of applications.
7.2.
Pending cases of sanction for prosecution:
IOB reported two cases. In one case meeting was held in CVC on 29.12.2008 and the CVO
assured that sanction should be given and the same will be implemented. In another case involving two officers, one
of them had retired, in the case of other the DA held the view that there was
no case and the matter has been taken up with the CBI in May 2008. IOB may give the details to the
Commission.
(Action: CVO, IOB)
In one case SPs report was sent in September 2008 and
draft sanction order was reported in November 2008. Only one case was justified and the other three officers are
being processed departmentally. CVO was
directed to write to the Commission in this regard.
(Action:
CVO, UIIC)
7.3.
Access of CVOs to complaints:
In most of the organizations the
CVOs do not have access to all the complaints.
It is advised that the CVOs should go through all the complaints to
ensure that complaints with vigilance angle are attended to properly.
7.4.
Structured meetings between CVOs and the CMD:
In the last year’s annual zonal
meetings, the Commission requested the CVOs to have monthly or quarterly
meetings with their CMDs as per their requirement with a proper agenda and
minutes of the meetings. It is observed
that this is not being followed in any of the organizations. The Commission directed the CVOs to
immediately commence the practice and report compliance in the monthly report
of February 2009 with a copy of the minutes of the meetings so held.
7.5. Agreed List:
Most of the organizations have prepared an “Agreed
List”.
7.6.
Pendency of First Stage, Second Stage advice, further
reports etc.:
There is a need to reconcile the
figures in most of the cases.
7.7.
Training and adequacy of vigilance staff:
The organizations reported that the
arrangements are adequate.
8. JS&CVO, DFS, informed
that considering the vigilance audit reports of Banks and the concern of CVC,
the Department is proposing to issue general instructions to the CMDs of Banks. CVC desired that the Commission may be shown
the draft instructions before issue by DFS.
Regarding complaints received she stated that CVOs could on a random
basis, once in a month, check the complaints.
8.
Action Points:
i.
CTE will have a
look at the systems put in place by the banks starting from April 2009 to see
its completeness and effectiveness. The
CTE will also look at the security related issues.
(Action: CTE)
ii.
The banks will keep
reporting from the next monthly report on the progress made, the insurance
companies including a report on the delay as compared to the commitments given
earlier.
(Action: Banks and Insurance Companies)
iii.
All the insurance
companies were directed to take advantage of the training facilities available
in the
(Action:
Banks and Insurance Companies)
iv.
An issue was raised by
Corporation Bank of
v.
Each organization
should submit to the Commission at least one CTE type inspection report every
year for information.
(Action:
All organizations)
vi.
The Commission will
explore the possibility of interactivity so that the CVOs can get into the CVC
system and update the status regarding pendency of first stage, second stage
advice, reports awaited on complaints including PIDP and further information or
clarification sought from organizations by the Commission.
(Action:
Commission)
vii.
The Syndicate Bank
reported that the internal advisory council is not functioning properly in the
bank and remedial actions are being taken.
CVO may submit an action plan and report progress through monthly
reports.
(Action: Syndicate bank)
viii.
The CVOs were also
directed to develop IT enabled weekly reports which might provide useful links
for the CVOs to follow. The CVOs may
develop such a system in consultation with the systems people and keep the
Commission informed.
(Action:
All CVOs)
ix.
As regards agenda
No.7, Vijaya Bank is to submit plan of action by end of March, 2009.
(Action:
CVO, Vijaya Bank)
x.
The Commission will
write to all the CMDs of insurance companies regarding the tardy progress in
the implementation of leveraging technology.
(Action:
Commission)
xi.
The CTE will
conduct inspections in the insurance companies.
(Action:
CTE)
xii.
The Oriental
Insurance Company Limited reported that in the case of a PSU, for a Rs.5 crore
policy premium, Rs.70 lakh commission was paid to an agent. All that the agent did was to get a quote on
the facts. The CVO was directed to
write to the Commission with details.
(Action:
CVO, OIC)
Annexure-A
List of the CVOs for the meeting dated 22/1/09 (Group 1,South Zone-I, Chennai)
1 Smt Ravneet Kaur
Joint Secy & CVO
Deptt of Financial Services
Jeevan Deep Building
Parliament Street
New Delhi
2 Shri H.N. Das,
Chief
Vigilance Officer,
Andhra
Bank,
Head Office,
Dr. Pattabhi Bhavan,
5-9-11, Saifabad,
Hyderabad- 500 004
3 Shri Sanjeev Krishnan
Chief
Vigilance Officer,
Corporation
Bank,
Head Office, Mangaladevi Temple
Road,
P.B.No.88, Pandeshwar,
Mangalore- 575 001
4 Shri C. Badri,
Chief
Vigilance Officer,
Indian
Overseas Bank,
Central Office, P.O. 3765,
763, Anna Salai,
Chennai- 600 003
5 Shri M. Damodaran Kamath,
Chief
Vigilance Officer,
Indian
Bank,
66, Rajaji Salai,
Chennai- 600 001
6 Shri M.R. Bagade,
Chief
Vigilance Officer,
Syndicate
Bank,
Corporate Office, 2nd
Cross,
Gandhinagar,
Bangalore- 560 009
7 Shri C.R. Chandramouli
Chief
Vigilance Officer,
Vijaya
Bank,
41/2, M.G. Road,
Trinity Circle,
Bangalore- 560 001
8 Shri A.K.Chanda,
Chief
Vigilance Officer,
National
Insurance Co. Ltd.,
3, Middleton Street,
Kolkata- 700 071
9 Smt. Gopa Ray,
Chief
Vigilance Officer,
New
India Assurance Co. Ltd.,
87, Mahatma Gandhi Road,
Fort, Mumbai- 400 001
10 Shri A.K.Gupta,
Chief
Vigilance Officer,
Oriental
Insurance Co. Ltd.,
Oriental House, P.B.No. 7037,
A-25/27, Asaf Ali Road,
New Delhi- 110 002
11 Smt. Gopa Ray,
Chief
Vigilance Officer,
General
Insurance Corp. of India,
‘Suraksha’, 1st Floor,
3, Tata Road, Mumbai- 400 026
12 Shri S.P.Sinha,
Chief
Vigilance Officer,
United
India Insurance Co.Ltd.,
24, Whites Road,
P.B.No. 676, Chennai- 600 014
13 Shri P. Senthil Kumar,
Chief Vigilance Officer,
Life
Insurance Corpn. of India,
Yogakshema, 4th Floor,
West Wing,
Jeevan Bima Marg, Mumbai- 400 021