The Finance Ministry has issued clear instructions to public sector banks and financial institutions, including insurance companies, to immediately report any vigilance-related issues involving Whole-Time Directors (WTDs) and other board-level officials.
This direction has been given by the Department of Financial Services (DFS) after it was noticed that in several cases, important negative information about senior officials was not reported on time. According to the DFS, banks and institutions often report such information only when they are specifically asked to provide vigilance clearance.
The ministry pointed out that serious inputs such as private complaints, court observations, references from the CBI, or information from other law enforcement agencies were sometimes shared very late. In some cases, this information was completely left out of vigilance clearance reports. Institutions reportedly claimed that the vigilance clearance formats did not have a specific column for such disclosures.
The DFS said that hiding or omitting important information, especially information related to appointments, promotions, and board-level postings, is a serious matter. It stressed that strict compliance is expected from all public sector institutions.
The ministry has now clearly directed banks and financial institutions to immediately report any adverse information related to board-level officials, even if the issue occurred when the official was working in a different role and not at the board level.
It has also asked institutions to ensure that vigilance clearance reports are detailed and complete. These reports should include court or tribunal observations, findings of internal committees, serious audit observations, and communications from any government department or investigating agency. Chief Vigilance Officers (CVOs) have been instructed to ensure that vigilance clearance reflects the most accurate and updated position, and that no important information is hidden.
This directive comes in the backdrop of a recent and unusual decision by the government to demote Union Bank of India’s Executive Director Pankaj Dwivedi to the post of General Manager at Punjab & Sind Bank. The decision was linked to an ongoing case in the Delhi High Court, where it was alleged that his appointment as Executive Director did not follow rules due to the absence of proper vigilance clearance.
The government’s move highlights the importance of full transparency and timely reporting in matters related to senior appointments in public sector institutions.
