NPA Accounts: In an effort to protect business decision-takers, the Finance Ministry has issued a uniform Employee Accountability Framework for NPA accounts up to Rs 50 crore.
With a view to protect bankers who take sound business decisions, the Finance Ministry has issued uniform employee accountability rules for accounts with non-performing assets (NPA) up to Rs 50 crore. These guidelines will be implemented with effect from April 1, 2022, for the accounts turning NPA from the next financial year.
The Indian Banks Association (IBA) said in a statement that the Department of Financial Services (DFS), Ministry of Finance, in its order dated October 29, has notified all public sector banks (PSBs) to have NPA accounts (other than fraud cases) up to Rs 50 crore. ) for the adoption of comprehensive guidelines on ‘Employee Accountability Framework’.
Bank employees’ accountability fixed
It said that banks have been advised to revise their employee accountability policies based on these comprehensive guidelines and to devise procedures with the approval of the respective boards.
These guidelines will help allay the apprehension that banks may be framed for their genuine commercial judgment to be wrong. This will help banks take faster credit decisions and help support the economy.
New guidelines on Staff Accountability Framework for NPA Accounts up to Rs. 50 Crores to back prudent decision making and protection for bonafide action.@FinMinIndia
— DFS (@DFS_India) October 31, 2021
Work to be done within 6 months
The IBA further said that banks will have to complete the work of employee accountability within six months from the date of classifying the account as NPA. Further, it said that depending on the size of the business of the banks, a threshold limit for checking accountability has been advised by the Chief Vigilance Officer (CVO).
The IBA said in the statement that due weightage will also be given to the past track record of the officers in evaluation or approval/monitoring. Presently, different banks are following different procedures to make staff accountability work. Along with this, the accountability of the employees is being fixed in respect of all the accounts becoming NPA.
