Economic Policy Updates RBI Announces A Whistleblower Policy For Private, Foreign Banks

Economic Policy Updates

RBI Announces A Whistleblower Policy For Private, Foreign Banks

The Reserve Bank of India (RBI) has introduced a whistleblower policy for private and foreign banks that allows customers, shareholders, NGOs and other members of the public to complain in confidence

The complaints could relate to corruption, misuse of office, criminal offences, suspected/actual frauds and failure to comply with rules. Public sector banks and the RBI were already covered under the Central Vigilance Commission (CVC) which is the ‘designated agency’ to receive written complaints or disclosure on any allegation of corruption or misuse of office and recommend appropriate action.

However, since the CVC’s jurisdiction is restricted to government employees, the RBI has now formulated a scheme called ‘Protected Disclosures Scheme’ for private and foreign banks. The policy will not cover anonymous/ pseudonymous complaints. The RBI will be the nodal agency to receive complaints under the scheme.

However, the complainants’ identity would be revealed if complaint turns out to be frivolous and action has to be initiated against the complainant. According to the scheme, the complainant should ensure the issue raised by him involves dishonest intention/moral angle.

The RBI says if the allegations are substantiated, it will recommend appropriate action. These could include: appropriate action to be initiated against the concerned official, administrative steps to recover the loss caused to the bank as a result of the corrupt act or misuse of office.

It can also recommend initiation of criminal proceedings to the appropriate authority/agency, recommend taking corrective measures to prevent recurrence of such events in future.