PNB Fraud: Union demands employee as directors on bank Boards

No employee directors on the Boards of banks have been appointed for the last three years, according to the All India Bank Employees Association secretary CH Venkatachalam.

The Bank Nationalisation Act of 1969 provides for the appointment of workman employee and officer category director in all the public sector banks, but for the last three years these two posts are lying vacant in all the 20 public sector banks.

Venkatachalam told DNA Money, " I personally met finance minister Arun Jaitley three times and he assured us that he will be looking into it. After this, we wrote to Prime Minister Narendra Modi, but so far there has been no response. My last meeting with the finance minister was on September 15, 2017."

The union called for strengthening the bank Boards by appointing the employees on the Boards of banks so there is a greater transparency in the running of banks. Governance issues have been a concern with most PSBs and they say a democratic representation would improve governance at these banks.

The employees union said the representation of employees on the bank boards has been ignored by the government despite repeated reminders.

"The scheme has been in vogue since 1972 and all these years, the Workman Employee and Officer Employee directors have been appointed in terms of the procedure provided in the Scheme. This scheme was included in the Act in order to provide worker participation at the Board management level," Venkatachalam said.

With the large-scale frauds happening in banks, the employees unions believe that they could be important guardians of the credit decisions that are taken and enable a democratic functioning of the banks.