Citing the slowdown, Nirmala Sitharaman encouraged banks to give loans without fear of the three C’s. After successive weak GDP growth rate in past quarters, the government is taking a step to boost the financial sector.
Fear of Three C’s
Union Finance minister, Nirmala Sitharaman, in a meeting with top officials of Public Sector Banks and CBI director ensured bankers of no interference by the government in their commercial decisions. She said that a fair distinction will be made between genuine business failures and fraudulent actions. She assuaged banks of the fear of three C’s – Central Bureau of Investigation (CBI), Comptroller and Auditor General of India (CAG), and Central Vigilance Commission (CVC).
Citing the worries, she said that no investigation will be carried by any of the committees unless reported by the bank itself. Further Nirmala Sitharaman urged banks to set up internal vigilance committee that follows a defined protocol to look into the fraud cases of their employees. CBI will only take the cases worth Rs 3 crore or more. She further mentioned meeting Enforcement Directorate, Directorate of Revenue Intelligence and the Income Tax Department to clarify ambiguities of banks.
Government’s Reforms
Several measures taken by the government have helped in restoring banks health. GNPA of Public Sector banks declined to Rs 7.27 trillion in September 2019 from Rs 8.96 trillion in March 2018. Besides, 13 banks have reported profits in H1 2020. The government has also made huge infusions to the banks to strengthen the overall availability of credit.
Following PM Modi’s vision of encouraging bold investment, Nirmala Sitharaman assured no harassment for business failures. Further, the CBI would work in line with Income tax guidelines and send notices with registration numbers to avoid any unauthorized communications. Also, the agency carrying out criminal proceedings will preserve the business value. By considering it as separate from the culpability of individuals.
The CBI with other officials will organize workshops to clear doubts about the process. It has also provided the facility of lodging e-FIR by sending an email to the designated Id of CBI.
In all, the government will ensure that no bank is harassed unnecessarily.