Finance Ministry Tightens Vigilance Reporting Rules For Whole-Time Directors

New Delhi, Dec 29 (KNN) The finance ministry has directed public sector banks and financial institutions, including insurance companies, to promptly report vigilance related matters concerning whole-time directors (WTDs) of their respective organisations.

Directive by Department of Financial Services

The directive comes from the Department of Financial Services (DFS), following instances where adverse information about board-level appointees was not reported in a timely manner, reported PTI. 

According to the DFS, critical adverse inputs, such as private complaints, court observations, references, or intelligence from the CBI or other law enforcement agencies, are often disclosed only when Vigilance Clearance is specifically sought from Chief Vigilance Officers (CVOs) of public sector undertakings (PSUs).

Concerns Over Omission of Crucial Information

The advisory noted that, in certain cases, vital information relating to WTDs is omitted in Vigilance Clearance formats because no specific column exists for such disclosures. 

The DFS emphasised that failure to report significant inputs, especially those relevant to appointments, promotions, board-level postings, and placement of WTDs, is a matter of serious concern.

Instructions for Immediate Compliance

Public sector banks and financial institutions have been instructed to immediately report adverse inputs regarding board-level officials, even if the alleged lapse occurred in another capacity. 

The DFS also advised submitting comprehensive disclosures in vigilance clearance formats, including observations or directions from courts or tribunals, internal committee findings, serious audit observations, and communications from any department or agency.

CVOs are required to ensure that vigilance clearances reflect the most updated and accurate status at the time of issuance, and that no material information is suppressed.

(KNN Bureau)