Protection to bankers: IBA knocks FinMin doors again

The Indian Banks Association (IBA) has once again knocked the Finance Ministry’s door on the crucial aspect of protection to both retired and serving bankers post the now much talked about former SBI Chairman Pratip Chaudhuri’s arrest incident.

The Department of Financial Services has been requested by the IBA to extend protection to all serving and retired officers with the prior permission clause in line with the one already available for central government officials, sources in the banking industry said.

This is the second letter from the IBA, which had soon after Chaudhuri’s arrest on October 31 written to DFS seeking a new procedure to safeguard bankers’ against state-level authorities, including police in cases of loan defaults.

Also read: Bankers protest against Chaudhuri’s arrest, want FinMin to intervene

Now, IBA has said that the mechanism should involve prior permission clause in line with the GoI officers.

On October 31, Chaudhuri was arrested from his Delhi home by the Jaisalmer police for his alleged role in the Garh Rajwada hotel project in Jaisalmer. This project was financed — to the tune of ₹ 25 crore — by State Bank of India in 2007. This incomplete project was sold to Alchemist ARC in March 2014.

Chaudhuri has been a director at Alchemist ARC since his retirement in September 2013.

Soon after his arrest, several top level bankers called the decision unfortunate and sought protection of individuals by a legal framework so as to ensure that commercial decisions are taken without delays.

After a week in judicial custody, former SBI Chairman Pratip Chaudhuri got a bail in the Garh Rajwada hotel project case.

It may be recalled that protection of Section 197 of Criminal Procedure Code is already available to government servants, mandating prior sanction of concerned government before taking cognisance by any Court of offence allegedly committed by public servant in discharge of official duties. As per a Supreme Court judgment, same is not available to public sector undertaking employees.