Finance Ministry Directs PSBs to Promptly Report Vigilance Issues Linked to Whole-Time Directors

Advisory Issued After Delays in Reporting Adverse Inputs​

The finance ministry has instructed public sector banks and financial institutions, including insurance companies, to immediately report vigilance-related matters involving whole-time directors of their respective organisations. The directive has been issued by the Department of Financial Services under the ministry.

The move follows multiple instances where adverse information concerning board-level appointees was not disclosed in a timely manner, raising concerns over governance and transparency.

Delayed Disclosure of Critical Vigilance Information Flagged​

According to the advisory, critical inputs such as private complaints, court observations, references, or communications from the Central Bureau of Investigation and other law enforcement agencies were often disclosed only when vigilance clearance was specifically sought from Chief Vigilance Officers.

In several cases, important information related to whole-time directors was reportedly omitted from vigilance clearance formats, citing the absence of a dedicated column for such disclosures.

Omission of Material Information Termed a Serious Concern​

The Department of Financial Services observed that the omission of significant information, particularly details relevant to appointments, promotions, board-level postings, and placement of whole-time directors, is a matter of serious concern. It stated that strict compliance is expected from all public sector undertakings in such matters.

The advisory clearly directs public sector banks and financial institutions to immediately report adverse inputs related to board-level officials, even if the alleged issue pertains to a role held outside the board position.

Comprehensive Vigilance Disclosure Now Mandatory​

The finance ministry has also advised entities to ensure comprehensive disclosures while seeking vigilance clearance. This includes observations or directions issued by courts or tribunals, findings of internal committees, serious audit observations, and communications received from any department or agency.

Chief Vigilance Officers have been instructed to ensure that vigilance clearance reflects the most updated and accurate status as of the date of issuance, with no suppression of material information.

Earlier Demotion Highlights Governance Sensitivity​

Earlier this year, the government demoted Union Bank of India Executive Director Pankaj Dwivedi to the position of General Manager at Punjab and Sind Bank. The decision was linked to an ongoing case in the Delhi High Court.

It has been alleged in court proceedings that his appointment as Executive Director violated regulatory norms due to the absence of vigilance clearance, underscoring the importance of timely and complete disclosure in senior-level appointments.