Sunday, May 18, 2014
What is Nayak committee report?
“On 20th January 2014, Reserve Bank of India (RBI) constituted an Expert Committee,
under the Chairmanship of Shri P.J.Nayak, Ex-Chairman of Axis Bank,
to review “Governance of the Boards of Banks in India”.
The Committee has submitted its Report on 12th May 2014 recommending, inter alia,
(i) scrapping of Bank Nationalisation Acts, SBI Act and SBI (Subsidiary Banks) Act,
(ii) Converting all PSBs into Companies under the Companies Act,
(iii) Formation of a “Bank Investment Company” (BIC) under the Companies Act and transfer of all Shares held by the Central Government in PSBs to the newly formed BIC
(iv) Controlling authority/power of the Central Government over PSBs to the transferred to
BIC which would, in turn, hand over the same to respective Boards of the PSBs,
(v) Government’s concern about PSBs would be limited only to earning “return on investment” and BIC’s ultimate responsibility would be limited only to ensuring a fair “return on investment” to the Central Government,
(vi) appointment of CEOs, other “inside Directors” and top Executives of PSBs would be vested in “Bank
Boards Bureau” (BBB) comprising of three serving or retired Chairmen of Banks and the Government
would have no say in the matter,
(vii) proportionate voting right to all shareholders,
(viii) reduction of Government’s share-holding to 40%,
AND LAST, BUT THE MOST DANGEROUS OF IT ALL,
(ix) “Cases of vigilance enforcement against wholetime directors and other bank employees for decisions taken by them must be based on evidence that the director or employee personally made a wrongful gain. For levelling criminal charges, fraud must manifest itself through evidence of self-benefit. In loan and expenditure cases, deviations from procedure must not constitute the sole basis for initiating criminal action.”
The “Recommendations” of the Committee, you shall appreciate, is a step forward to Privatisation of
Public Sector Banks in tune with the neo-liberal reforms agenda being pursued by the Central
Government since early 1990s.
What is more alarming is that it would also open up flood gates for more liberalized loot of Banks’ Funds (that is people’s savings); as per the recommendation (point - ix hereinabove), criminal intent and/or criminal breach of trust and/or flouting of rules & regulations, etc,
would not be enough to warrant criminal charge unless and until “self-benefit” is established against the
In tune with its tradition of struggle against all neo-liberal reforms measures,
UFBU has given a call for holding demonstrations in all centres all over the country on 21-5-2014 after office hours against the ill advised recommendations of the “Expert” (?) Panel.
Our affiliates/units are accordingly advised to HOLD DEMONSTRATIONS.
COURTESY: BEFI circular.