Tamil Nadu Grama Bank Staff Accountability Policy 2024-25 PDF

Staff Accountability Policy 2024-25 Inspection and Audit Department Head Office Salem “This Policy supersedes and replaces Staff Accountability Policy 2023-24” ...

Staff Accountability Policy 2024-25 Inspection and Audit Department Head Office Salem “This Policy supersedes and replaces Staff Accountability Policy 2023-24”  Policy Certification Title: Staff Accountability Policy 2024-25 Owned by HO: Inspection & Audit Department Prepared by HO: Inspection & Audit Department Approved by Board Effective from 01.04.2024 One year from the effective date / until Validity next review  Addition/Deletion/Modification to Staff Accountability Policy 2023-24 S. No Existing Policy Modification Proposed 1. 1.Purpose 1.Purpose 1.1 Hence, the basic approach to the study 1.1 Hence, the basic approach to the Staff of Staff Accountability (SA)----------- Accountability Study (SAS)---------- 2. Addition 1.12 ix. Statement of account to study the overdue pattern of the account and defaulted repayment which caused the account to become NPA x. Other sources 3. Addition 6.1 a The Staff Accountability Study Reports should be discussed in the RSAC meeting and the details of discussion for individual accounts should be recorded separately in the minutes. The minutes should be submitted to HO : Inspection Audit Department 4. Addition 6.2 Regional Audit Committee of Executives (RACE) a) Inspection Centre Head – Chairman of the Committee b) Regional Manager c) Second-in-Command d) Officer-In-charge of Inspection and Audit Department (OMU) (member and convenor) The Staff Accountability Study Reports should be discussed in the RACE meeting and the details of discussion for individual accounts should be recorded separately in the minutes. The minutes should be submitted to HO : Inspection Audit Department 5. 6.2 HO Staff Accountability 6.3 HO Staff Accountability Committee: Committee: I. Chairman level HO Staff Accountability 1. GM level HO Staff Accountability Committee: Committee: GM level Head Office Staff Accountability Chairman level HO Staff Accountability Committee consists of the following members: Committee consists of the following a) General Manager (Admin) – Chairman members: of the Committee a. Chairman – Chairman of the b) Head of Recovery Department Committee c) Head of Credit Monitoring Cell b. General Manager (Admin) d) Head of Credit department c. Head of Recovery Department e) Head of Inspection & Audit Department d. Head of Credit Monitoring Cell e. Head of Credit Department The quorum for the meeting of the Committee The quorum for the meeting of the shall be three members. Head of HO: Inspection Committee shall be three members. Head & Audit Department shall be the convenor. of HO: Inspection & Audit Department shall be the convenor.  II. GM level HO Staff Accountability 2. Chairman level HO Staff Accountability Committee: Committee: GM level Head Office Staff Chairman level HO Staff Accountability Accountability Committee consists of Committee consists of the following members: a) Chairman – Chairman of the Committee the following members: b) General Manager (Admin) a. General Manager (Admin) – c) Head of Recovery Department Chairman of the Committee d) Head of Credit Monitoring Cell b. Head of Recovery Department e) Head of Credit Department f) Head of Inspection & Audit Department c. Head of Credit Monitoring Cell d. Head of Credit department The quorum for the meeting of the Committee The quorum for the meeting of the shall be three members. Head of HO: Inspection Committee shall be three members. Head & Audit Department shall be the convenor. of HO: Inspection & Audit Department shall be the convenor. 6. Deletion 8.iv Fresh slippage of Time barred DPNs more than 10 in number or the amount involved in freshly slipped time barred debts is more than Rs.5.00 lakhs 7. 10. b. In respect of the accounts falling 10. b. In respect of the accounts falling under the under the purview of HO/SAC, once the purview of HO/SAC, once the staff accountability staff accountability aspect is examined by aspect is examined by them and actionable them and actionable lapses are lapses are established, General Manager shall call for explanation from the staff on whom established, General Manager shall call lapses are observed. On receipt of explanation for explanation from the staff on whom from the staff, the details will be placed to HO lapses are observed. On receipt of Staff Accountability Committee (HOSAC). The explanation from the staff, the details will Committee will deliberate the facts and be placed to IAC (Internal Advisory circumstances of each case and shall record its Committee). The Committee will recommendation on classification of each case deliberate the facts and circumstances of as vigilance or non- vigilance for forwarding the each case and shall record its same to Internal Advisory Committee (IAC) for recommendation on classification of each further action. case as vigilance or non- vigilance for In respect of cases where the explanation is seeking First Stage Advice from CVO of called for by RM, he/she shall send the same with the sponsor bank by the DA. On receipt his/her views to HO for placing before Internal of CVO’s advice, DA will proceed further Advisory Committee. with disciplinary proceedings against the Internal Advisory Committee (IAC) consists of staff member. In respect of cases where Heads of the following Departments. the explanation is called for by RM, i. Vigilance he/she shall send the same with his/her ii. Recovery views to Inspection and Audit Department iii. Accounts for placing it to HO Staff Accountability iv. Credit and Committee which in turn will recommend v. Planning it to the convenor, IAC for placing before HOD Vigilance Department will be the convenor Internal Advisory Committee. IAC shall of IAC. Minimum quorum will be three. In the absence of minimum quorum, the Chairman will deliberate and record its recommendation nominate new members. as to the classification of case based on which DA will seek the First Stage Advice from CVO of the Sponsor Bank.  Internal Advisory Committee consists of heads of i. Recovery Department ii. Accounts Department iii. Credit Department and iv. Planning Department HOD Vigilance Department will be the convenor of IAC. Minimum quorum will be three. In the absence of minimum quorum, the Chairman will nominate new members. 8 ii. all accounts with exposure of above Rs. ii. All accounts with exposure of above Rs. 1.00 laks and up to Rs 5.00 laks where 1.00 lakh and up to Rs. 5.00 lakhs where Staff Accountability Study was conducted Staff Accountability Study was conducted by RACE. by RACE.  STAFF ACCOUNTABILITY POLICY 2024-25 1. Purpose 1.1 In banking institutions, risk taking forms an integral part of business. lt would be quite unfair to use the benefit of hindsight to question the technical merits of business decision taken. At the same time, it would be inappropriate to ignore motivated and reckless decisions due to not adhering to system and procedures, which have caused damage to the interests of the Bank. Hence, the basic approach to the study of Staff Accountability Study (SAS) will be to draw a line between a business loss which has arisen as a consequence of bonafide commercial decisions and an extraordinary loss which has occurred due to malafide I motivated I reckless I negligent performance of duties 1.2 The intent of the Staff Accountability Study (SAS) will be to find out reasons for failure of a borrowal account, besides determining the factors that resulted in loss / likely loss, if any, in the account and not to fix the onus of failure on someone or the other, somehow or the other. The initiation of staff action will only be a corollary. The examination of staff accountability shall be a fact-finding exercise rather than a fault-finding exercise and shall be done in such a way that it will eradicate the fear of staff accountability in the minds of the field level functionaries. 1.3 External factors such as change in Government Policy, change in market conditions, sudden change in the management of the Borrowal entity affecting the functioning of the entity and all such factors which are beyond the control of the official/s concerned shall be given due consideration in the examination of staff accountability. However, during such situations, it is essential that suitable steps have to be taken by the concerned Branch officials to safe-guard the interest of the Bank. This aspect is to be necessarily analysed by the official while conducting Staff Accountability Study. 1.4 The exercise shall be carried out with reference to the circumstances prevalent at the time when the relevant decision was taken, without the benefit of hindsight gained due to subsequent developments in the account I market conditions. 1.5 Each and every loss in a borrowal account need not necessarily mean the existence of a staff lapse. This will be taken as the underlying principle in taking up a Staff Accountability Study. The cause of loss or probable loss shall be isolated and studied, to find out whether the loss was caused or is likely to be caused by factors beyond the control of the officials concerned or by any internal human failure. Bonafide commercial decisions taken without negligence and in the normal course of business will not be questioned merely due to the fact that the borrowal account has failed leading to loss or probable loss to the Bank. 1.6 On examining the account, if it is determined that the loss for the Bank arose or is likely to arise due to any negligence I omission I commission on the part of the official/s concerned, it will be further determined as to whether the loss could have been averted had the official/s not committed the act of negligence I omission I commission. That is, it would be assessed as to whether the loss was caused or is likely to be caused by and only by the lapse of the official/s concerned. The intensity of staff action to be taken will depend on how and to what extent the lapses of the official/s concerned resulted in the loss incurred or likely to be incurred. 1.7 While all bonafide actions of the official/s concerned shall be studied on the basis of the above principles, malafide actions, abuse of official position, misuse of delegated powers, gross and wilful negligence, recklessness in decision making, flagrant violation of systems and procedures, exercise of discretion in excess where no ostensible public interest is evident, failure to keep the controlling authority informed in time in the case of deviation Page 1 of 10  from rules/guidelines and exceeding discretion, causing concomitant gain to any individual/s or party/ies, non-compliance to adherence to respective country regulations, etc. will not fall within the purview of the above principles and approach of staff accountability action. In all such cases, the actions of the official/swill be studied by isolating their actions from the loss, if any, incurred or likely to be incurred. 1.8 Staff accountability aspect needs to be looked into at various stages such as Pre sanction appraisal, sanction, documentation, disbursement, post-disbursement, monitoring, follow up, review/renewal of advances, etc. 1.9 Staff accountability exercise should be carried out keeping in mind the policies I guidelines relevant at the time of decision taken, not based on the subsequent changes in policies I guidelines. 1.10 While conducting the staff accountability exercise, irregularities I lapses at different levels of controls and systems should be analysed and accountability should be fixed as per the guidelines/responsibilities assigned in the Job cards for various levels of functionaries at Branches I ROs / Internal auditors. 1.11 Failure on the part of the internal auditors to bring out any serious irregularities which are otherwise detectable but not brought out in the report during the period of review, out of negligence / laxity shall be brought under the ambit of Staff Accountability. 1.12 Sources for conducting Staff Accountability study may be derived from the following: i. Inspection Report of the Branches / Controlling Offices; ii. Report of Internal / External Concurrent Auditors / Statutory Auditors, NABARD Inspectors; iii. Special Reports / Flash reports / Fraud Reports by Inspectors / Auditors etc. iv. Charge taking report from the new incumbent; v. Branch visits / Review of NPAs, Inspection Reports, periodical returns, vi. Investigation Report I CBI investigation vii. Complaints; viii. Whistle-blowing references ix. Statement of account to study the overdue pattern of the account and defaulted repayment which caused the account to become NPA x. Other sources 2. Scope of the policy 2.1 The policy shall apply to all accounts I cases pertaining to the branches. 2.2 Staff Accountability in certain other areas (Illustrative list): i. Forged I Fraudulent Cheques: Where the signature appearing on the forged/fraudulent cheque apparently and with the naked eye tallies with the specimen signature lodged with us and is otherwise in order and payable in normal course of business, the staff accountability shall be examined taking into consideration the circumstances of the case, negligence, involvement of the official concerned. ii. Fake Documents: Generally NO Staff Accountability need be fixed in the event of a fraud perpetrated by Borrower / Guarantor / Mortgagor / other Third Party based on fake / fabricated / forged title deeds where involvement of staff is apparently not found / observed and if ordinary precautions expected of a prudent banker have been exercised by the officials concerned including 1. Obtention of proper Legal Scrutiny Report (LSR) where the Advocate has confirmed having verified the original title deeds, as per the policy of the Bank and Page 2 of 10  has confirmed the title, the flow of title, marketability/enforceability of the property and all documents as per the LSR have been obtained; 2. Engineer Valuation Report (EVR) obtained as per the guidelines of the policy. 3. Property proposed to be mortgaged has been visited and its existence is verified and confirmed 4. The mortgagers have been properly identified and their presence has been confirmed while executing the mortgage papers/deed; 5. Guidelines as circularized through mortgage and other guidelines advising precautionary measures to be followed for mortgage / charge creation of securities. 3. Objective of Policy: 3.1 Borrowal accounts may become distressed assets for the Bank either due to internal or external factors. Whenever a borrowal account fails and becomes distressed due to internal factors too, the account needs to be examined closely for analysing the systemic deficiencies, if any, which has resulted in the failure of the account. Besides, a study has also to be done to assess internal human failures that have led to the account becoming distressed. 3.2 The objective of the Staff Accountability Policy (SAP) is to enhance the morale of the employees who are working in the interest of the organisation and within the frame work of Bank's guidelines. lt is also to create an environment in which officers/employees are encouraged to be decisive and where no officer is harassed for bonafide mistake and errors of judgment. At the same time, it would be unfair to ignore the actions/inactions. 3.3 The objective of the Staff Accountability Study (SAS) is to identify the causative factors for failure of the account and to take appropriate corrective action for minimizing systemic failures and human failures. 3.4 While fixing accountability a line should be drawn to separate malafide decisions from normal bonafide credit decisions in order to keep the morale of the staff high. 3.5 Staff Accountability study shall also be conducted for irregularities I lapses observed in non-credit related areas and for non-compliance of Regulatory/Bank's guidelines. 3.6 Every employee is duty bound to discharge work with due diligence and faithfully in accordance with: i. Systems and procedures laid down ii. Rules and Regulations in force iii. Guidelines whether general or specific iv. To work within the authority delegated or when such authority is exceeded, with the approval of appropriate authority Custodian of the Policy: The General Manager (Admin) will be the custodian of the Policy. 4. Timeliness of conducting Staff Accountability Study and initiating staff action: i. There is a general need to ensure that the Staff Accountability Study is done within a reasonable time, in order that the actions of the official/s concerned shall not be questioned after unreasonably long period of time and the lapses can also be rectified at the earliest. ii. Details of fresh accounts slipped to NPA will be made available by HO: Recovery Department to Branch/RO/HO to arrange for conducting Staff Accountability Study for all eligible fresh NPA accounts. iii. If RO/HO conducts investigation in any of the loan account either NPA or Standard or in non-credit related matters, then the concerned department Head will inform the Page 3 of 10  same to HO: SA Cell and to the respective controlling authority to avoid duplication of examination of Staff Accountability. The Investigating Official (IO) including from Vigilance Department should specifically mention in the report the details of lapses attributable to staff with name of official/s and nature of lapses. The same report (other than conducted by HO: Vigilance Dept.) will be placed to Staff Accountability Committee. iv. ln case, Staff Accountability has been examined earlier, then there is no need for re-examination of Staff Accountability until or unless there are sufficient additional grounds for re-examination of staff accountability. 4.1 Staff accountability study for all fresh NPA accounts should be taken up immediately upon flagging the account as NPA without any cooling period. However, if the account is upgraded during the process of SA study, by recovering the critical/overdue amount, SA study may be deferred. The trigger point for conducting Staff Accountability Study will be earliest of any one of the following events occurring in the borrowal accounts. a) account slipping to NPA category b) at the time of filing suit c) at the time of considering OTS either in NPA or in standard accounts (in exceptional cases) d) Any adverse findings reported in any audit including Concurrent Audit, Credit Audit, Stock Audit, RBIA / RI, LFAR, Branch visit report by Executives, NABARD Inspection Report, etc. warranting study on staff lapses. 4.2 "Non-credit areas where malafide intention or violation of procedural guidelines is observed shall also to be brought under the ambit of Staff Accountability". An illustrative list of such irregularities is given below: a) Non-compliance to KYC/AML/CFT guidelines b) Failure to comply with extant guidelines of Regulators and other agencies viz. NABARD, RBI, SEBI, IRDAI, PFDRA, IT Department, FIU-IND, CVC, FEMA etc. c) Unauthorised debit to Customers Account d) Unauthorised debit to Branch GLs. e) Irregularities in procurement of goods, works and services including appointment of Consultants, TPE, etc. f) Misutilisation of staff benefits like LFC, etc. g) Misappropriation of Customers' I Bank's funds h) Lacking control in and misuse of nominal accounts such as Sundry Deposit, Sundries Receivable, Subsidy Reserve Fund, etc. i) Opening/maintaining/using of unauthorised parking/fictitious accounts j) Lacking control over leakage of interest/non-interest income k) Allowing loan documents to get time barred l) Failure in filing of EP,etc in time 4.3 Entire exercise of examination of staff accountability is to be completed within a. 180 days of identification/classification of any advance related account as non- performing asset; and b. 90 days from the date of reporting of incidence in all other cases. Page 4 of 10  Staff accountability process is to be completed on priority basis for accounts/cases where retiring staff are involved. The official who is assigned with SA study as well as the officials of Staff Accountability Cell at Head Office/Regional Offices shall be held responsible for any delay in study due to their laxity or negligence on their part. 4.4 Quick Mortality Accounts: a. All accounts becoming NPA within a period of one year from the date of first disbursement, in respect of limits sanctioned to borrowers for the first time are to be treated as Quick Mortality Cases. b. In case of Term Loans, where repayment / moratorium period has been permitted, the period of one year shall be reckoned from the date, the first instalment is due for repayment. c. Wherever two or more instances of Quick Mortality Cases with individual book balance of Rs.5 lakhs and above are reported· by a branch during a quarter, Regional Manager shall take up with HO: Staff Accountability Cell to decide whether to verify all loans sanctioned by the official in the branch and get the same recorded in the minutes of the RACE meeting. Further, HO: Staff Accountability Cell shall take a quick view on:  Corrective actions required, if any  Identifying serious irregularities, probable fraud, etc  Initiating comprehensive staff action d. ln case of Quick Mortality borrowal accounts, staff accountability is to be examined carefully from various angles such as verification of KYC norms, CIBIL, Due Diligence of the Borrower/Firm/Company/Trust, etc. and for different stages like Pre- sanction appraisal, Sanction, Disbursement, Monitoring, etc. as per various policies of the Bank. 4.5 Every endeavour shall be made to conduct the staff accountability for the lapses in advance account within 4 years of the relief of the officer from the Branch so that remedial measures can be taken up at the earliest with / without involving the staff reportedly committed the lapses. At the same time, the Bank shall endeavour to complete the staff accountability at least 3 months before the retirement of the staff. However, where malafide intention is observed Staff Accountability may be looked into beyond this period, after obtaining the approval of HO Staff accountability committee stating specific reasons. Such cases can be only exceptional and the Chairman / General Manager should be discreet and judicious in taking up such cases. For any omissions / commissions observed in the Staff Accountability Study Report but not reported in the inspection reports, then the respective inspecting official/s would be held responsible”. 4.6 The Regional Audit Committee of Executives should take a decision on whether Staff Accountability Study is warranted or not with regard to irregularities pointed out in the RBIA / Regular Inspection report and accordingly proper steps I follow up measures are to be taken before closure of the report. 4.7 None of the above time limitations shall apply to cases involving vigilance angle or in which criminal intent is observed or fraud has been perpetrated. Page 5 of 10 5. Standardized formats for submitting Staff Accountability Report: The Staff Accountability Study is based on the outstanding balance excluding MOI. The standardized format/s devised by HO: Staff Accountability Cell shall be used for the study of Staff Accountability Study. The formats are given in Annexure- I, II, III & IV 6. Authority to determine Staff Accountability: The designated competent authorities to assess / determine staff accountability are as under based on the exposure in the account: Exposure in the account / S. No. Amount involved in non-credit Competent Authority related issues 1 Up to amount of Rs 1.00 lakh Regional Staff Accountability Reports to be submitted by Branch committee (RSAC) headed by RM 2 Above Rs 1.00 lakhs and upto Rs RACE – (Regional Audit 5.00 Lakh* Committee of Executives) headed (Reports to be submitted by Officials by IC-Head. sent by RO) 3 Above Rs 5.00 lakhs to Rs.7.50 lakhs* GM level HO Staff Accountability (Reports to be submitted by Officials Committee sent by IC/HO). 4 Above Rs. 7.50 lakhs Chairman level HO Staff (Reports to be submitted by Officials Accountability Committee sent by IC/HO). # Exposure means the book balance outstanding in the account as on the trigger date (excluding MOI). *In respect of group accounts, while considering for conducting the staff accountability the overall exposure should be taken into account. If the group exposure is above Rs.5.00 lakhs, then the same should be referred to Head Office for conducting study which will arrange for the study by deputing officials from HO / IC. In respect of non-credit related lapses, involving the amount up to Rs 5.00 lakhs. Regional Office will take up staff accountability study and the cases of above Rs 5.00 lakhs will be taken by HO through IC or directly. The HO Staff Accountability Committee has been bifurcated into Chairman level HO Staff Accountability Committee and GM level HO Staff Accountability Committee and in order to expedite the Staff Accountability Process. GM level HO Staff Accountability Committee will determine staff accountability for amount exposure of up to Rs. 7.50 lakhs which covers more than 95% of the term loans (other than Jewel Loans and LoDs) granted. 6.1.Regional Staff Accountability Committee (RSAC): a.Regional Staff Accountability Committee shall consist of the following Officers: i. Regional Manager Page 6 of 10  ii. In-charge of Recovery Department iii. In charge of Inspection Department (member and convenor) Regional Manager will be the Chairman of the committee. The Staff Accountability Study Reports should be discussed in the RSAC meeting and the details of discussion for individual accounts should be recorded separately in the minutes. The minutes should be submitted to HO: Inspection & Audit Department b.Accounts sanctioned by Regional Manager: If any of the incumbent members of the Regional Staff Accountability Committee had any role in the loan account / issue in question in any capacity whatsoever, then the staff accountability will be determined only by Head Office Staff Accountability Committee, irrespective of the amount of exposure. 6.2 Regional Audit Committee of Executives (RACE) a) Inspection Centre Head – Chairman of the Committee b) Regional Manager c) Second-in-Command d) Officer-in-charge of Inspection and Audit Department (OMU) (member and convenor) The Staff Accountability Study Reports should be discussed in the RACE meeting and the details of discussion for individual accounts should be recorded separately in the minutes. The minutes should be submitted to HO: Inspection & Audit Department 6.3 HO Staff Accountability Committee: 1. GM level HO Staff Accountability Committee: GM level Head Office Staff Accountability Committee consists of the following members: a. General Manager (Admin) – Chairman of the Committee b. Head of Recovery Department c. Head of Credit Monitoring Cell d. Head of Credit department e. Head of Inspection & Audit Department The quorum for the meeting of the Committee shall be three members. Head of HO: Inspection & Audit Department shall be the convenor. 2. Chairman level HO Staff Accountability Committee: Chairman level HO Staff Accountability Committee consists of the following members: a. Chairman – Chairman of the Committee b. General Manager (Admin) c. Head of Recovery Department d. Head of Credit Monitoring Cell e. Head of Credit Department f. Head of Inspection & Audit Department The quorum for the meeting of the Committee shall be three members. Head of HO: Inspection & Audit Department shall be the convenor. Page 7 of 10 7. Process at Branches: a. ln all cases of slippage of assets - accounts with exposure upto Rs.1.00 lakhs, into non performing category, the Staff Accountability Report (as per annexure I or II, as the case may be) shall be prepared and submitted by the Branch Manager to the Regional Manager within 30 days from the date of flagging of the account as NPA. However, determination of staff accountability would be made by the Committee headed by RM as per the Authority mentioned in the Policy. b. BM may prepare individual report in the format described in annex II, for the account wherever staff lapses are observed. The details of other accounts (where no staff lapses are not observed will be furnished as per format given in annexure I. c. While submitting the Staff Accountability Report, the Branch Manager should scrutinize all aspects of the account and make a mention of all the lapses observed and the official/s responsible, irrespective of whether or not the loss / potential loss is caused by the lapses of the official/s concerned. d. If the advance had been sanctioned by the incumbent Branch Manager himself, examining staff accountability shall be done by the Regional Office, as per procedure detailed in para 8 below 8. Process at Regional Offices / Head Office: a. Regional Offices shall have the primary responsibility to collect the basic inputs in the formats prescribed for this purpose from the branches for all stressed borrowal accounts with exposure up to Rs. 1.00 lakhs within 30 days from the date the account is flagged as NPA. b. For the accounts with balances above Rs 1.00 lakhs and up to Rs.5.00 lakhs Regional Managers have to depute officers for collecting the information which will be examined and accountability determined by following the above methodology. In exceptional cases requiring expertise, Regional Managers can take up with HO: Inspection & Audit Department, or IC requesting the services of Branch Inspectors or Officials at HO: Credit Department. c. On receipt of the Staff Accountability Reports, Regional Office should study the Reports from all angles and in conjunction with the records already available, like regular inspection reports, special inspection reports, concurrent audit reports, statutory audit reports, NABARD inspection reports, etc. If the information available in the Staff Accountability Report and the records held are insufficient to assess the aspect of accountability on the part of the official/s concerned, Regional Office may get an investigation conducted into the account. For this purpose, Regional Offices shall normally use officers with credit experience available at Regional Offices. In exceptional cases, where the scope of investigation to be carried out is wide, Regional Office may take up with HO: Staff Accountability Cell or IC requesting the services of the inspector or Officials at HO: Credit Department. d. Specific cases of staff lapses identified by the Regional Manager / Regional Staff Accountability Committee and RACE will be referred to the appropriate Disciplinary Authority by Regional Office, for taking DP action besides informing the Staff Accountability Cell at HO: Inspection & Audit Department e. In all other cases, where the authority to conduct the Staff Accountability Study is with HO: Staff accountability Cell and it will arrange for Staff Accountability Study and place the report to the HO: Staff Accountability Committee for further action. Page 8 of 10 If the deficiencies reported in the staff accountability report conducted at RSAC/RACE level fall under the following Zero Tolerance areas such reports are to be forwarded to HO Staff Accountability Cell for further action irrespective of loan amount. i. Non creation/ Non Registration of mortgage deed or MOTD for the securities in favour of the Bank & except in cases where the original title deeds pertaining to primary security could not be obtained as the loan is not disbursed in full or where the seller is a housing Board (Govt. Body), etc., where normally there is a time delay in passing on the title deeds, ii. Non creation of charges with ROC iii. Non registering of Bank’s hypothecation clause in RC book of the vehicles financed by the Bank iv. Sanction exceeding Branch Manager‘s discretionary powers. 9. Process in accounts where element of staff accountability is not observed: a. In respect of the accounts / group of accounts falling under the authority of the Regional Manager / RSAC, wherever the Regional Manager observes that the slippage of the account is not caused by any act of commission or omission of any official/s, but was caused by factors beyond the control of the official/s concerned, the Regional Manager / RSAC may record the reasons and close the staff accountability report. Similarly for the accounts falling under the purview of RACE, same procedure will be followed. However, in order to comply with the CVC guidelines, all large value NPA accounts i.e. accounts with book balance of Rs.1 Crore and above where staff accountability study is conducted, a copy of such report is to be forwarded to CVO and the sponsor Bank irrespective of the fact that whether lapses are fixed or not. b. In all other cases, where the authority to conduct the Staff Accountability Study at Head Office level, the committee of members constituted for the purpose, may record the reasons and close the staff accountability report and inform the authorities who have referred the said account. 10. Accounts where elements of Staff Accountability is observed: a. In respect of the accounts / group of accounts falling under the authority of the RSAC / RACE for deciding the Staff Accountability, as defined in chapter 3.1 of the policy, the Regional Manager shall call for the explanation of the official/s responsible for the lapses, irrespective of where the official is placed at the time of initiating the staff action. It shall however be ensured that the official whose explanation has to be called for is neither a Regional Manager himself nor equal in scale to the Regional Manager calling for the explanation of the official. Otherwise the matter shall be referred by the Regional Manager to the HO: Staff Accountability Cell, for calling for the explanation of the official concerned. In cases where RM calls for explanation from the staff concerned, the reply will be forwarded to HO: Inspection, along with his views. b. In respect of the accounts falling under the purview of HO/SAC, once the staff accountability aspect is examined by them and actionable lapses are established, General Manager shall call for explanation from the staff on whom lapses are observed. On receipt of explanation from the staff, the details will be placed to HO Staff Accountability Committee (HOSAC). The Committee will deliberate the facts and circumstances of each case and shall record its recommendation on classification of each case as vigilance or non- vigilance for forwarding the same to Internal Advisory Page 9 of 10  Committee (IAC) for further action. In respect of cases where the explanation is called for by RM, he/she shall send the same with his/her views to HO for placing before Internal Advisory Committee. Internal Advisory Committee (IAC) consists of heads of the following Departments. i. Vigilance ii. Recovery iii. Accounts iv. Credit and v. Planning HOD Vigilance Department will be the convenor of IAC. Minimum quorum will be three. In the absence of minimum quorum, the Chairman will nominate new members. 11. Maintenance of records and Reporting: a. Head of Inspection & Audit Department, will be the Convenor of “Chairman level HO Staff Accountability Committee” and “GM level HO Staff Accountability Committee” which will look into staff lapses and fix accountability. b. Staff Accountability Cell at HO: Inspection & Audit department will be the nodal point for studying the lapses, attributable to staff, if any. c. Regional Office shall maintain records of all stressed accounts where Staff Accountability Study has been conducted, and decided by RSAC / RACE. Such information relating to the previous quarter will be submitted before the end of subsequent quarter. d. Regional Office should send to Staff Accountability Cell at HO as at the end of each quarter (June, Sept, Dec, March), the list of: i. All accounts with exposure up to Rs.1.00 lakh where Staff Accountability reports were submitted by Branches and study was conducted by the RSAC. ii. All accounts with exposure of above Rs. 1.00 lakh and up to Rs. 5.00 lakhs where Staff Accountability Study was conducted by RACE. iii. All accounts / group of accounts referred by Regional Office to Head Office for conducting Staff Accountability Study and a consolidated statement furnishing the progress achieved for all fresh NPA accounts. The format of the above report to be sent to Staff Accountability Cell at HO: Inspection & Audit Department is given in Annexure V. 12. Review of the Policy : The policy shall be reviewed based on further regulatory guidelines and operational experience. Changes / Modifications / Relaxations in the policy can be approved by the Board only. -------------oOo------------ Page 10 of 10  Annexure – I Report for Staff Accountability Study (To be submitted to Regional Office) (Staff report for the accounts with Balance up to Rs 1.00 lakh, where no staff lapses are observed) Branch: Region : Date: Loan Nature of Present Balance NPA Status Sl Name of Date of A/C loan Limit Book M ML SS/D1/D2/D3/ Reason No Borrower Sanction No /purpose Balance OI E Loss for the a/c becoming NPA Remarks Certificate: We certify that No Staff lapses are observed in the above accounts. Branch Manager  Annexure - II Report for Staff Accountability Study (To be submitted to Regional Office) (For accounts with book balance outstanding up to & inclusive of Rs. 1.00 lakh as on date of NPA) Branch: Region: Date: A. General Details: 1. Name of the Account: 6. Book balance: Rs. 2. CBS No. 7. MLE: Rs. 3. Asset Classification as on 31.03.20__ 8. MOI: Rs. 4. Provision as on 31.03.20__ : Rs. 9. Total Dues : Rs.: (As at _______) 10. Nature of Security: 11. Security Value: i) Present Value: Rs. ii) At the time of sanction: Rs. iii) Reason for difference (if any) in value: B. Sanction details: Original/enhancement i) Date of sanction: iv) Purpose: ii) Amount: v) Sector / Sub-sector: P / NP;___________ iii) Sanctioning Name SR No. Designation vi) Facilities FB: authority NFB:_____________________ Total:_____________________ i) Date of Enhancement / last renewal iv) Purpose: sanction: v) Sector / Sub-sector: P / NP;___________ ii) Amount: vi) Facilities FB: iii) Sanctioning authority NFB:_____________________ Name SR No. Designation Total:_____________________ C. Pre-sanction appraisal: i) How the account was canvassed? Who canvassed it? Details of market report obtained to ensure quality & safety ii) Whether credit requirements were assessed as per credit policy of the Bank? iii) In case of take over finance, whether policy guidelines of the Bank followed and Confidential Report obtained from other Bank? iv) Whether KYC norms followed? D. Sanction: i) Whether sanction was made within the powers delegated to the sanctioning authority? ii) Whether terms and conditions of sanction complied with? E. Documentation: Whether the prescribed documents were taken and properly executed and charges created as per terms of sanction? F. Post sanction / disbursement follow up: i) Whether end use of funds ensured as per sanction terms / Head guidelines? ii) Whether there is any lapse in monitoring the account? G. Date of NPA: __/__/____ H. Reasons for the account becoming NPA: (Including staff lapses if any) Whether the account was reported under SMA? If so, the date and follow up action taken I. Any comment / deficiency pointed out in Statutory / Concurrent audit / Inspection / RBI report (during the last three years) which could have averted the slippage and their present status? J. Present position of the account: Realisability of the balance, action taken / to be taken, likely loss, possibilities for minimising the loss etc. to be informed. K. Whether claims (ECGC, CGS of CGTMSE etc.) preferred and settled? If no, why?  a) If claim is rejected, date of rejection and reasons: L. Whether irregularities were reported to the Controlling office and Directions issued by controlling office complied thereof? (Please furnish details with date of compliance) M. Lapses attributable to Staff if any for the account becoming bad and doubtful / NPA: Lapse/s if any attributable at various stages of Pre sanction appraisal, Sanction, Period Lapses Action taken, if any Name of the staff: SR No.: Designation N. Observation / Comments of the Branch Manager: Branch: Date: Signature of the Branch Manager Note: Abbreviation for MLE – Memorandum of legal expenses / other expenses not debited in the loan account  Annexure - III Report for Staff Accountability Study (To be submitted to Regional Office by the Inspecting Official) (For accounts with book balance outstanding above Rs. 1.00 lakh and up to Rs. 5 lakhs as on date of NPA) Branch: Region: Date: A. General Details: 1. Name of the Account: 6. Book balance: Rs. 2. CBS No. 7. MLE: Rs. 3. Asset Classification as on 31.03.20__ 8. MOI: Rs. 4. Provision as on 31.03.20__ : Rs. 9. Total Dues : Rs.: (As at _______) 10. Nature of Security: 11. Security Value: i) Present Value: Rs. ii) At the time of sanction: Rs. iii) Reason for difference (if any) in value: B. Sanction details: Original/enhancement i) Date of sanction: iv) Purpose: ii) Amount: v) Sector / Sub-sector: P / NP;___________ iii) Sanctioning authority vi) Facilities FB: Name NFB:_____________________ SR No. Total:_____________________ Designation i) Date of Enhancement / last renewal iv) Purpose: sanction: v) Sector / Sub-sector: P / NP;___________ ii) Amount: vi) Facilities FB: iii) Sanctioning authority NFB:_____________________ Name Total:_____________________ SR No. Designation C. Pre-sanction appraisal: i) How the account was canvassed? Who canvassed it? Details of market report obtained to ensure quality & safety ii) Credit Requirement: Whether assessed as per credit policy of the Bank? iii) Take over finance: In case of take over finance, whether policy guidelines of the Bank were followed and Confidential Report obtained from other Bank / branch? iv) Credit worthiness: Whether credit worthiness verified through credentials (eg. A&L, IT / Wealth tax returns etc. and through independent sources? v) Valuation: Whether correctness of the valuation report (nature, extent, location, encumbrance of the property, etc.) was verified independently to the market value quoted in the report? vi) Whether KYC norms followed? D. Sanction: i) Whether sanction was made within the powers delegated? E. Documentation / Disbursement: i) Whether the prescribed documents were taken and properly executed? ii) Deficiencies observed, if any in creation of charges iii) Whether terms and conditions of sanction are complied with? If not specify the deviation: iv) Whether end use of funds ensured? F. Monitoring / Post sanction follow up: i) Whether delegated powers exercised judiciously in conduct of the account (eg. excesses allowed) and duly reported to controlling office? ii) Whether periodical inspection of movable and immovable assets, stocks undertaken and timely action taken to rectify the irregularities found if any? iii) a) Whether claims / CGS of CGTMSE etc. preferred as per stipulation and settled? If not why? b) If claim is rejected, date of rejection and reason iv) Whether any deficiency observed in the conduct / monitoring of the account? Steps taken to rectify the irregularity if any? v) Whether periodical review / renewal of limits done? If yes, mention the latest date: vi) Any comments / deficiencies pointed out in statutory / concurrent audit / inspection remains to be rectified, which could have averted slippage and their present status? If those deficiencies still persist how those reports were closed / dealt with (furnish in a separate sheet about the deviations along with RO direction, if any, to the branch) vii) Whether documents are kept in force? G. Date of NPA: __/__/____ H. Reasons for the account becoming NPA: (Including staff lapses if any)  Whether the account was reported under Pre SMA / SMA category? If so, the date and follow up action taken by the branch: I. Any other reason that is attributable to the staff for the unit becoming sick / account becoming bad. J. Steps taken for upgradation / recovery: Details of action taken under SARFAESI etc. K. Present position of the account: Realisability of the balance, action taken / to be taken, likely loss, possibilities for minimising the loss etc. to be informed. L. Lapses attributable to Staff if any for the account becoming bad and doubtful / NPA: Lapse/s if any attributable at various stages of Pre sanction appraisal, Sanction, documentation, disbursement, post sanction follow up, reporting irregularities etc. shall be furnished here below: Period Lapses Action taken, if any Name of Staff SR No. Designation M. Any other observation: Signature of the Branch Manager Signature of the inspecting official Branch: Branch: Date: Date:  Annexure IV Report for Staff Accountability Study (To be submitted to HO: Staff Accountability Cell as applicable by the Inspection Officer) (For account with book balance outstanding above Rs. 5 lakhs as on date of NPA) Part – I Branch: Region: Date: A. General details: 1. Name of the Account: 2. Constitution of the unit: 3. Name/s of Proprietor / Partners / Directors 4. Names of the guarantors: 5. Line of business / Activity and present status: 6. Net worth of the borrower i) Present net worth ii) Net worth at the time of sanction 7. Net worth of the guarantor i) Present net worth ii) Net worth at the time of sanction 8. If under consortium, share of individual members to be furnished: 9. Whether any related group account is there. If so, the details are to be furnished separately (Staff Accountability report to be submitted separately in case of NPA) 10. Balance details / present position of accounts as on __________: Facility CBS Limit DL Book MLE MOI Total account No. balance dues 11. Asset classification as on 12. Provision as on 13. Nature of security Security Value: Primary (mention details) i) Present value ii) At the time of sanction Collateral Security i) Present value ii) At the time of sanction (Separate list may be attached in case of many securities) Reason for difference, if any, in value: B. Sanction details : Original i) Date of sanction ii) Sanctioning authority: Name : SR No: Designation: Facility and amount of sanction i) Fund based a) b) ii) Non-fund based a) b) Total: Purpose of loan: Sector / sub-sector : P/NP Enhancement / Last renewal sanction Date of sanction ii) Sanctioning authority: Name : SR No: Designation: Amount of sanction i) Fund based a) b) ii) Non-fund based a)  b) Total: Purpose of loan: Sector / sub-sector : P/NP Note: Inspecting official should furnish all the details of sanctions from the date of original sanction and name of the official / SR No. / Designation of the sanctioning authority should be furnished without fail. C. Pre-sanction appraisal: 1. How the account was canvassed? Who canvassed it? Details of market report obtained to ensure quality & safety 2. Credit Requirement: a) Whether assessed as per credit policy of the Bank? b) In case of adhoc / enhancement sanction, whether sanctioning authority obtained / verified the relevant papers to justify the enhancement / adhoc sanction. If the enhancement considered within a year of sanction, reasons / justification thereof: c) Whether caution lists of CIBIL, RBI, etc. verified? d) Whether all financial statements / audited balance sheets obtained and verified (other than exempted category). Whether confirmation received from chartered accountant firms with regard to the genuineness of the same as per Loan Policy in force (if applicable). Whether ROC site verified in cases where filing by the borrower is mandatory (if applicable). e) Whether pre sanction inspections were carried out to inspect the units / properties mortgaged? f) Details of internal / external rating Whether rating has been done at the time of sanction. Adversities, if any, to be reported. Whether it is ensured that account has not scored ineligible rating. g) Whether any relaxation done? (eg. relaxation in ROI, relaxation in terms and conditions etc.) If relaxation permitted by higher authority, whether relevant sanction obtained. (details to be furnished) h) Whether appropriate sanctions / permission have been obtained wherever necessary eg. taking agri properties as security for non agri loans, obtaining third part securities as collateral, creating EM with duplicate / certified copies of title deeds etc. 3. Take over finance: In case of take over finance, whether policy guidelines of the Bank were followed and Confidential Report obtained from other Bank / branch? In case of non compliance, the areas of non compliance may be listed out. 4. Credit worthiness: Whether credit worthiness verified through credentials (eg. A&L, IT / Wealth tax returns etc. and through independent sources? 5. Valuation: Whether correctness of the valuation report (nature, extent, location, encumbrance of the property, etc.) was verified independently to the market value quoted in the report? 6. Whether KYC norms followed? D. Sanction: 1. Whether sanction was made within the powers delegated? 2. Whether credit facility not authenticated by the sanctioning authority has been extended to the customers? If so, details thereof. E. Documentation / Disbursement: 1. Whether pre-release audit has been carried out for eligible accounts and the observation have been complied with? 2. Whether the prescribed documents were taken and properly executed? 3. Mortgage creation: a) Whether mortgage creation has been done for all the properties as per extant guidelines. b) Whether EM registered as per extant guidelines. c) Whether genuineness of the title deeds verified. d) Whether legal audit conducted for the accounts with limit of 1 crore and above and the enforceability of all the documents verified. e) Whether latest encumbrance verified. Deficiencies observed, if any in creation of charges? 4. In case of advances to Limited Company, whether charges have been registered with ROC as per stipulation? Whether search report obtained and our charges have been verified? 5. Whether all terms and conditions of sanction are complied with? If not specify the deviation: 6. Whether end use of funds ensured? (Deviation may be furnished) a) In case of machinery, etc. whether the same purchased as per sanction. b) If not, whether permission obtained from sanctioning authority. c) Whether valuation obtained after installation. d) Whether utilisation certificate obtained wherever necessary. F. Monitoring / Post sanction follow up: 1. Whether delegated powers were exercised judiciously in conduct of the account (eg. excesses allowed) and duly reported to controlling office? 2. Whether periodical inspection of movable and immovable assets, stocks undertaken and timely action taken to rectify the irregularities found if any? 3. Whether periodical stock statements, Book Debt statements / MSOD / QIS reports have been regularly obtained? Whether DP arrived properly? 4. Whether stock audit / credit audit have been conducted as per norms? Any adverse comments in the report which have bearing on the slippage of the account. 5. Whether the account is subjected to LRM. Any adverse comments made and rectification thereof. 6. a) Whether the account is eligible for coverage of any guarantee scheme. If so, whether covered under the scheme. b) If not, reasons for non coverage. c) Whether renewal premium paid in time to ensure their continuity of coverage under the relevant scheme. d) Whether claims of CGTMSE preferred as per stipulation and settled? If not why? e) If claim is rejected, date of rejection and reason 7. Whether periodical review / renewal of limits done? If yes, mention the latest date: 7. a) Whether confirmation received from chartered accountant firms with regard to the genuineness of audited financials. Whether ROC site verified in cases where filing by the borrower is mandatory. (if applicable) 8. In case of Restructured accounts, whether the norms have been followed properly, sanction terms adhered? If not, furnish the details. 9. Any comments / deficiencies pointed out in statutory / concurrent audit / CMO / inspection remains to be rectified, which could have averted slippage and their present status? If those deficiencies still persist how those reports were closed / dealt with (furnish in a separate sheet about the deviations along with RO direction, if any, to the branch) 10. Whether documents are kept in force? 11. Whether any other deficiencies observed in the conduct / monitoring of the account? Steps taken to rectify the irregularity if any?  G. Date of NPA: __/__/____ H. Reasons for the account becoming NPA: (Including staff lapses if any) Whether the account was reported under Pre SMA / SMA category? If so, the date and follow up action taken by the branch: I. Any other reason that is attributable to the staff for the unit becoming sick / account becoming bad. J. Steps taken for upgradation / recovery: Details of action taken under SARFAESI etc. K. Present position of the account: Realisability of the balance, action taken / to be taken, likely loss, possibilities for minimising the loss etc. to be informed. Signature of the inspecting official Signature of the Branch Manager Name: Name : Date: Date :  Report for Staff Accountability Study (For account with book balance outstanding above Rs. 5 lakhs as on date of NPA) Part – II Branch: Region: CBS Account No.: CBS Code: Comments by the inspecting official 1. Lapses attributable to staff if any for the account becoming bad and doubtful / NPA: Lapse/s if any attributable at various stages of Pre sanction appraisal, Sanction, documentation, disbursement, post sanction follow up, reporting irregularities etc. shall be furnished here below: Period Lapses Remarks / action taken Name: SR No.: Designation 2. Any other observations / comments by the inspecting officials: (Inspecting official to critically study the lapses if any, which contributed to the deterioration of the quality of asset. If the slippage is due to internal factors like not following prescribed procedures, defective documentation, inadequate follow up / visit to the unit, failure to initiate timely action, which could have arrested slippage and failure to protect the securities charged in the account etc., action taken / to be taken on such lapses to be specified. Lapses noticed should be pin pointed by the inspecting official.) Signature of the inspecting official Name: Date: Region: ___________________________ Annexure – V Statement of Fresh Non-Performing Accounts for staff accountability study for the quarter ended _________ A. Consolidated Report on Staff accountability (Rs. in lakhs) Total Fresh Of (A) no. of accounts Of (A) no. of accounts Of (A) no. of accounts NPAs with balance with balance with balance (A) outstanding for Rs. 1 outstanding above Rs. outstanding for above lakh 1 lakh and up to Rs. 5 Rs. 5 lakhs (B) lakhs (D) (C) RSAC (Regional Staff RACE (Regional Audit HO : Staff Accountability Committee of Accountability Committee) Executive) Committee No Amount No Amount No Amount No Amount 1 Total no. of fresh NPAs identified as on _________ Of (1) a ‘No’ staff lapses observed b Staff lapses observed Action initiated on ‘b’ c Staff lapses identification in process Total (B+C+D) should tally with total no. of NPA’s (A)