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The Finance Ministry has tightened its grip on top management of Banks. The Ministry has increased monitoring in India’s banking system and has asked all state-owned banks and financial institutions to immediately report any serious issues involving top-level officials, including whole-time directors and board members.
As per reports, this action from Finance Ministry comes after the Managing Director and CEO of UCO Bank, Ashwani Kumar, continued in office even after the Central Bureau of Investigation (CBI) filed a chargesheet against him. Ashwani Kumar, the current MD and CEO of UCO Bank, was named by the Central Bureau of Investigation for allegedly approving export bill discounting for Lal Sons Jewellers in 2014 in violation of lending norms, when he was heading the Large Corporates Branch of Oriental Bank of Commerce (OBC). OBC Bank was later merged by the Government with Punjab National Bank (PNB) in 2020. The loan later turned into a non-performing asset, causing a loss of around ₹150 crore to the bank. The investigation by CBI is still ongoing.
The controversy is that Ashwani Kumar continues to hold one of the most powerful positions in a public sector bank despite an active CBI case. Experts pointed out that this goes against Central Vigilance Commission guidelines, which state that any official under investigation should not occupy a key post.
On November 11, a CBI special court directed Ashwani Kumar to submit a bond of ₹50,000. The court also barred him from leaving the country and from influencing any witnesses. The CBI told the court that he was not arrested because the bank did not cooperate and also did not give the required approval for prosecution.
According to the chargesheet, Ashwani Kumar approved 30 export bills even though there were no confirmed export orders, no letters of credit, and despite negative risk reports related to Passi Jewellers, a Dubai-based group entity. A forensic audit by two independent firms found that Lal Sons diverted funds and opened parallel accounts in Punjab National Bank and Axis Bank without OBC Bank’s permission. Investigators stated that fund diversion of approximately ₹48 crore was already known to bank officials at the time of restructuring, yet due diligence was not enforced. The CBI alleged that the irregularities were a result of a conspiracy between company officials and certain bank officers.
Now, the Finance Ministry has written a strict letter to banks and asked them to share complete and accurate information while seeking vigilance clearance for senior officials. This includes court orders, serious audit findings, observations from internal committees, and any communication from investigative agencies. The ministry has also clearly stated that complaints, court remarks, and references from agencies like the CBI must be reported without delay.
The ministry has further asked banks to keep vigilance records updated at all times so that wrong approvals at the top decision-making level can be avoided. As per existing rules, if a vigilance case remains pending for more than six months, banks must send a quarterly status report to the Finance Ministry and also inform their own board.
Click here to read UCO Bank CEO Chargesheet Case
