'What is RBI doing when these frauds were happening?'

'Let them put their house in order first.'
'Let the RBI first rectify themselves.'

In order to prevent frauds of mammoth proportions happening in public sector banks, the RBI now wants bankers in sensitive positions to go compulsorily on leave for 10 days every year.

According to the Reserve Bank of India, this is one way to prevent banking scams.

In the concluding segment of the interview C H Venkatachalam, general secretary, All India Bank Employees Association, tells Rediff.com's Shobha Warrier, "RBI can't think they are the monopolists of wisdom."

• PART I: 'Why can't they catch the big thief?'

Is this like a suspension? Will a person be asked to take leave when they want to probe something?

No, this is not a suspension or a probe; this is a routine check. There is no administrative guideline on what another person should do in his absence. It must be explained properly.

Intention to prevent a fraud is okay. But what the RBI has done is to come out with a decision in a mechanical bureaucratic way without the application of the mind.

But as the trade union, we will definitely oppose this move. They cannot ask a person to go on leave to find out a fraud.

First of all, without any complaint, they are doubting a person, and all those who are working in sensitive positions.

Won't this put all the bankers who work in such sensitive positions under a lot of stress because they are always under suspicion?

Yes. He will be under tremendous stress.

Suddenly when the bank asks a person to go on leave for 10 days, what will be tell his family?

when you say the bank is doing a vigilance check, people will think he has done something wrong.

People who know you will doubt your integrity. This is like casting aspersions on the integrity of everybody.

Do you think this will make bankers very reluctant to be in such sensitive positions?

Yes. It will demoralise the employees. It will frustrate them.

We, as the union know where to plug the hole. Why didn't the RBI discuss with us?

The Reserve Bank of India cannot think they are the monopolists of wisdom! Let the RBI first rectify themselves. The RBI wants to put banks under PCA (Prompt Corrective Action). Let PCA and all these preventive measures start from the Reserve Bank of India itself.

Because of their slackness, many of the bank fraud investigations could not be done under the top level. There is the Reserve Bank audit, there is the Reserve Bank pre-audit check, there is special audit.

So, what is the Reserve Bank doing when all these frauds were happening? Let them put their house in order first.

Can the Reserve Bank be above suspicion?

That's the question. The Reserve Bank also should be subjected to all these checks like the banks.

Why can't they talk to the Indian Bank Association, the unions, and then come up with suggestions?

By simply keeping a person away from work for 10 days, you are not going to achieve anything except casting aspersions on him and demoralising the person.

IMAGE: C H Venkatachalam. Photograph: Kind courtesy C H Venkatachalam

What measures should the RBI take to prevent frauds from happening?

They must start from the top; let the general managers, the board Members, etc also be away from work on leave for 6 months to one year. Let's see how many frauds are coming out.

Then, you check the next level executives.

Finally, you check the branch managers, the officers and the clerical staff.

Frauds happen due to certain decisions and these decisions are not taken at the lower level.

Then the RBI should strengthen the inspection department. We find that the audit and inspection are the weakest links in the banking system.

If somebody is not a performing manager, he is moved to the audit department. If somebody is not efficient, he is sent to the audit department.

Audit is a very important department, but we see that inefficient people are sent there. You need people with integrity in the audit department.

So, the RBI should first strengthen the audit and inspection departments; also, strengthen your technology platforms.

The present circular sent by the RBI is not acceptable to the union. We are going to oppose it for sure.

Feature Presentation: Ashish Narsale/Rediff.com