Top executives of PSU banks are outside service rules
In a reply to an application filed under the Right to Information (RTI) Act, the Department of Financial Services in the Ministry of Finance (MoF) has informed that there are no service rules or conduct rules or disciplinary/ appeal rules for CMDs/ EDs (Chairman and Managing Director/ Executive Director) of nationalised banks other than the terms and conditions of appointment.
It has been learnt that they are appointed on contract basis by the government and hence the service rules / conduct rules that are applicable for other bank officials are not applicable to EDs /CMDs. Bank officials have argued that when even the civil servants are subject to service/conduct/disciplinary rules, there is no reason to exclude the EDs /CMDs of government-owned banks from it. It is noteworthy that the general managers of banks are governed by service regulations and if the rules are not followed during any office work, like sanction of loan, they are liable for penalty. However, there are no conduct rules for the EDs and CMDs even if their actions hurt the bank leaving only the Prevention of Corruption Act as a weapon if there is a proof.