The
officers have been made the scapegoat as usual.Without the involvement
and understanding of the top officials of the bank,such irregularities
cannot happen in so many branches spread over various cities. The
instructions would have gone orally or in writing to have the
transactions carried out in a defined manner.Small officers sitting in
the counters cannot and will not take such risks in a whole sale manner
risking their job, self respect and social stigma.This must have been
done with the connivance of top officials and investigations should
involve them. Even the customers who have been benefited by these
devious deals should also be interrogated and booked for subverting the
system.The Regulators cannot be expected to keep a watch on the
individual transactions which is the duty of internal
supervisors,accountants and auditors.Financial intelligence Unit can
however keep a watch on such high value transactions as banks are
expected to report to them. If they have failed to report then it is a
serious lapse and should be made accountable Dr T.V. Gopalakrishnan( This comment is in response to a news item ICIICI BANK.Suspends18 officers appeared in ET dated 16/3/13).
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2 comments:
This is a correct assessment. The officials at the lower level are made scapegoats.It is unthinkable that the lower officials violate norms without a nod from the top.The second issue appears to be the target oriented approach in banks. The observance of KYC norms is done only where it is convenient to the bank. Smaller customers are harassed with KYC sword while the big fish are allowed to escape. I was a victim of such harassment by the same bank. I was not given the tax deduction certificate this year as I had not updated my KYC data! While all sort of promotional materials are sent by email, this important communication that I will not be given the tax deduction certificate unless I updated the KYC data, was sent by the bank by ordinary post and it remained in the letter box in the building as I was away for some time. The other issue is the dependence of banks on ultra short term, whole sale and high cost deposits. Banks tend to overlook KYC norms in such cases. What is the use of having compliance officers when such instances of money laundering surface at regular intervals? Everything, including observance of KYC norms, appears to be symbolic. Still there is a clamour for more private sector banks! And finally, as the saying goes -"If it is Tuesday, it must be Belgium"- are branches are opened without assessing the business potential in the area or based on the dictum “if it is Saturday a bank branch has to be opened in a particular district !!!”
K Sivaraman
This is a correct assessment. The officials at the lower level are made scapegoats.It is unthinkable that the lower officials violate norms without a nod from the top.The second issue appears to be the target oriented approach in banks. The observance of KYC norms is done only where it is convenient to the bank. Smaller customers are harassed with KYC sword while the big fish are allowed to escape. I was a victim of such harassment by the same bank. I was not given the tax deduction certificate this year as I had not updated my KYC data! While all sort of promotional materials are sent by email, this important communication that I will not be given the tax deduction certificate unless I updated the KYC data, was sent by the bank by ordinary post and it remained in the letter box in the building as I was away for some time. The other issue is the dependence of banks on ultra short term, whole sale and high cost deposits. Banks tend to overlook KYC norms in such cases. What is the use of having compliance officers when such instances of money laundering surface at regular intervals? Everything, including observance of KYC norms, appears to be symbolic. Still there is a clamour for more private sector banks! And finally, as the saying goes -"If it is Tuesday, it must be Belgium"- are branches are opened without assessing the business potential in the area or based on the dictum “if it is Saturday a bank branch has to be opened in a particular district !!!”
K Sivaraman
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