PNB MCB Mumbai AGM dismissed from Service for Deficiency in Loan Sanctioning and Monitoring, Court orders Bank to reconsider Punishment
Punjab National Bank AGM P K Varun has won a major case against the Bank. The Petitioner joined the Bank on 29th December, 1980. At the relevant time from 21st May, 2012 to 21st April, 2015, he was serving as Assistant General Manager and incumbent-in-charge at Branch Office MCB, Brady House, Mumbai.
On 26 July 2017, the petitioner was given a charge-sheet under Regulation 6 to start major penalty proceedings. The charge was broad and covered multiple issues. It stated that while approving loans for different borrowers, the petitioner did not follow proper procedures. He allegedly failed to carry out proper checks, did not follow the bank’s guidelines, did not do proper evaluation before giving loans, and did not monitor the loans properly after approval. Because of this, the bank’s interests were put at risk. The detailed allegations mentioned several mistakes related to five borrower accounts: Plymouth Multiventure Pvt. Ltd., Gopal Masterbatch Pvt. Ltd., Vision Machines Pvt. Ltd., K.V. Alloys, and Basil Resources Pvt. Ltd.
A departmental enquiry was conducted. The Enquiry Officer submitted the report on 18 October 2017. In the report, some charges were found to be proved, some partly proved, and some not proved. The petitioner also submitted his reply to this report.
On 31 October 2017, the Disciplinary Authority decided to dismiss the petitioner from service as a major punishment. The order was detailed and explained issues account-wise. It mentioned that the petitioner made mistakes while approving loans, such as accepting projections without proper checks, not collecting required documents, and not reviewing important reports. It also pointed out failures after loan approval, like not checking stock properly, not ensuring proper routing of sales, weak financial monitoring, and not following up on negative inspection reports.
The order also stated that two other charge-sheets dated 31 July 2017 and 27 October 2017 would be kept pending for the time being, with the option to reopen them later if needed.
The petitioner filed a departmental appeal, but it was rejected on 28 March 2018. The petitioner said that the mistakes were only operational but the Appellate Authority upheld the punishment and did not accept the argument that the mistakes were only operational or caused by other staff. It held that since the petitioner was in charge, he was responsible for ensuring that the bank’s rules and guidelines were properly followed.
The dismissal order was issued on the same day the petitioner was supposed to retire. Because of this, his retirement benefits have been withheld.
The Petitioner filed a case in court and alleged that he was targeted by the Bank. He said that several other junior officers were also named in the case, but they got little punishment and only he was dismissed from service. Court heard the arguments presented by the petitioner and gave following judgement.
The Court said that the competent authority shall reconsider the punishment afresh, keeping in view the Petitioner’s role vis-àvis other officials in the same credit chain, and shall pass a fresh, reasoned order within a period of six weeks from today.
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