AIBEA asks Government to set accountability standards for MD and ED of Public Sector Banks

AIBEA General Secretary CH Venkatachalam has urged the Government of India to fix accountability of MD and ED of Public Sector Banks. The All India Bank Employees’ Association (AIBEA) has written to the Ministry of Finance, calling for clear rules and accountability standards for top executives of public sector banks (PSBs), such as Managing Directors (MDs) and Executive Directors (EDs). The demand follows growing concerns over a controversial book purchase by Union Bank of India.

According to AIBEA, there are currently no specific conduct or disciplinary rules for MDs and EDs of government-owned banks, unlike other bank employees who follow strict codes of conduct. This lack of regulation, the association argues, creates room for misconduct and also leaves honest officials vulnerable to baseless accusations.

The issue came to light after media reports revealed that Union Bank had spent ₹7.25 crore to buy around 2 lakh copies of the book India@100. The book is written by Dr. Krishnamurthy V. Subramanian, a former Chief Economic Advisor and ex-Executive Director at the International Monetary Fund (IMF). Recently, Krishnamurthy V Subramanian has also been removed from his service as ED (India) at IMF before completion of tenure. India has Appointed Parameswaran Iyer as Temporary IMF Representative.

Reports have suggested that Subramanian may have influenced several banks to purchase his book in bulk. While there is no official confirmation, the timing of the purchase—especially as Union Bank’s MD nears the end of her term—has raised eyebrows. As of now, a General Manager at Union Bank has been suspended in connection with the deal. Click here to read about Union Bank controversy over book purchase.

In a letter to the Department of Financial Services, AIBEA General Secretary C.H. Venkatachalam expressed concern that in the absence of clear rules for top officials, only lower-level staff might end up being punished. He stressed that public sector banks manage huge amounts of public money—over ₹130 lakh crore—and therefore their governance must be transparent and accountable.

“Without proper regulations, even serious allegations remain in doubt, damaging public trust in the banking system,” Venkatachalam wrote. He added that the banking sector needs rules to ensure that wrongdoers are punished, while innocent officials are protected from being made scapegoats.

He also pointed out that many board-level positions in PSBs—like workman directors, officer directors, and public representatives—have remained vacant for years, weakening the overall governance structure. Venkatachalam questioned whether Subramanian, who once served on the P.J. Nayak Committee for improving bank governance, upheld those same values by encouraging the purchase of his book in such large numbers.

Meanwhile, the All India Union Bank Employees’ Federation (AIUBEF) has demanded the resignation of Union Bank’s MD and a full investigation into the book procurement process. Union Bank has admitted that there were “some lapses” in the purchase process and has launched an internal probe. This has intensified the call for new and comprehensive conduct rules for senior bank officials to ensure accountability and protect public trust in India’s banking system.

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• India Appoints Parameswaran Iyer as Temporary IMF Representative after exit of K.V. Subramanian
• Why Krishnamurthy Subramanian Removed from IMF? Know about him and Full Controversy
• Why Union Bank wasted Crores of Rupees on Book Purchase? Employees demand investigation