The Spotlight Is Back On Finance Minister Nirmala Sitharaman Following A Leaked Audio Clip, Where She Is Heard Shouting At State Bank Of India (SBI) Chairman Rajnish Kumar For Alleged Lapses In Know Your Customer (KYC) Norms For Tea Garden Workers In Assam. The Incomplete KYC Process Has Led To Several Accounts Getting De-Activated.

“Don’t Tell Me You Are The Largest Bank. You Are A Heartless Bank. SLBCs [State Level Bankers’ Committees] Don’t Function Like This,” Sitharaman Is Heard As Saying Targeting Kumar. She Adds “Yeh Nahin Chalega [This Can’t Be Allowed To Happen].” Kumar Is Heard Apologizing To The Minister.

But Important Question Is: Is The Minister Justified In Shouting At Kumar? While The All India Bank Officers Confederation (AIBOC) Initially Issued A Statement Condemning The Incident, It Later Withdrew It. The Statement Said That The Manner In Which The Minister Treated The Chairman Was Unfair. However, BJP Leader And Assam Minister Himanta Biswa Sarma Has Thanked Sitharaman For Her Act, Saying That The Many Tea Garden Workers Are Being Deprived Of Their “Rightful Dues” As They Are Unable To Withdraw Money From Their Accounts.

Whatever Be The Case, Sitharaman’s “Matron-Like” Behavior May Actually Do More Damage To The Morale Of Thousands Of Public Sector Bank Employees. Her Highhandedness Undermines The Stated Position And Ethos Of ‘Minimum Government, Maximum Governance’ Of The Narendra Modi Government. Prime Minister Modi Has Repeatedly Underlined The Need To Provide Full Autonomy To Public Sector Entities, Including Banks, To Function Better. Modi And His Team Have Been Vocal In Their Criticism Of The UPA Government’s Interference In The Functioning Of Public Sector Banks, Pointing Out That The Pile Of Non-Performing Assets—Loans That Do Not Fetch Returns—Was A Direct Result Of The Earlier Government’s Meddling In Day To Day Affairs.

Many Have Raised Concerns After Sitharaman Lashed Out At Kumar. Even If There Were Lapses In Completing The KYC Process, This Is Not The Way To Rectify The Situation. Such Instances Could Only Lead To More Carelessness; Bankers May Mindlessly Skip The Due Process Required For Adhering To KYC Norms. That Is Dangerous And Will Push NPA Levels. Let Us Look At The Mudra Scheme, Which Was Launched In 2015 To Improve Credit Access For The Small And Medium Enterprises. None Can Doubt The Intentions. But At The Same Time It Is Also Critical For Banks To Follow The Required Process Of KYC Norms. Bypassing Those To Meet Targets Could Spell Disaster. The Reserve Bank Of India Has Recently Raised Concerns Over The Rising Level Of NPAs Arising Out Of The Mudra Scheme.

It Has Already Crossed Over 5 Per Cent. Sitharaman Must Realize That The Morale Of Bank Officials Is Low, Especially After The Nirav Modi Scam Came To Light Involving The Punjab National Bank. The Top Managements Of Banks Have Always Been Under Stringent Scrutiny By The Central Bureau Of Investigation, The Central Vigilance Commission, And The Enforcement Directorate, Among Other Bodies, Constraining Their Functioning. Several Senior Bankers Have Unofficially Complained Of This Vigilance As This Only Hinders Risk Taking Abilities. Sitharaman Needs To Understand The Complexities Of The Situation And Allow Public Sector Banks To Operate Independently. Otherwise, Public Sector Autonomy Would Remain An Empty Slogan..