Finance Ministry Tightens Vigilance Reporting for Bank Directors

The finance ministry has mandated prompt reporting of vigilance-related matters concerning whole-time directors of public sector banks and financial institutions. This directive addresses delays in reporting adverse information about board-level appointees, ensuring comprehensive disclosure in vigilance clearance processes.

The finance ministry has issued a directive to public sector banks and financial institutions, including insurance companies, requiring them to promptly report any vigilance-related matters concerning their whole-time directors. This comes in response to previous instances where adverse information about board-level appointees went unreported in a timely fashion.

The directive from the Department of Financial Services highlights serious concerns over the omission of significant information, particularly information relevant to appointments and promotions. The ministry has mandated comprehensive disclosures in vigilance clearances, including court directions and internal committee findings, to ensure transparency.

In a related development, Executive Director Pankaj Dwivedi of Union Bank of India was demoted to General Manager due to vigilance clearance issues, underscoring the importance of the ministry's directive for strict compliance by PSUs.

(With inputs from agencies.)