Bankers Seek Insurance To Cover Legal Fees Due To Mounting Investigations
Bankers want insurance to cover legal costs after investigative authorities initiate action
Bankers will seek insurance cover to pay for legal costs as lenders grapple with investigations by various authorities, said VG Kannan, chief executive officer of the Indian Banks’ Association.
At a meeting among top bankers, the IBA arrived at some actionable points which could help protect bank officials against undue investigations against them. Bankers suggested that they be given support from the government to protect genuine decisions made by them. “IBA will lead a delegation to make representation to highest authority and get some kind of protection for genuine decisions made by the bankers,” Kannan said.
The meeting took place after the Economic Offences Wing of the Pune police arrested the Chairman and Managing Director of the Bank of Maharashtra Ravindra Marathe and Executive Director Rajendra Gupta in a fraud investigation against DSK Developers. The police have alleged quid pro quo on the part of bankers for approving loans to the company. Sushil Munhot, former CMD of Bank of Maharashtra has also been arrested in the case.
Kannan told reporters that the IBA and the rest of the banking community are confident that the loans extended by Bank of Maharashtra were given after due process and were fully secured.
During their meeting today, bankers discussed the possibility of creating a committee headed by a former banker, which could direct investigating agencies on the kind of action that could be taken against an erring banker. The committee would first assess any case of alleged wrongdoing and then seek appropriate action.
With too many investigative authorities focussing on alleged banking sector malpractices, it was becoming difficult for bankers to continue their functions, according to Kannan.
A letter from the banking community had already been sent to the Rajiv Kumar, secretary in the Department of Financial Services and an appointment is being sought for a meeting with the finance minister, he added.
Watch this interview with IBA chief VG Kannan.