Mumbai, Jul 9: Bankers working in sensitive positions, including in treasury operations, will be compulsorily sent on surprise leave for at least 10 days every year, with the RBI putting in place a prudential risk management framework to curb possible misconduct by employees. The latest move is apparently aimed at early detection as well as prevention of forgeries like the one perpetrated by fugitive diamantaire Nirav Modi and his uncle Mehul Choksi. The decision also comes at a time when there are rising instances of cyber frauds.
Nirav Modi and Mehul Choksi in connivance with certain bank officials cheated Punjab National Bank (PNB) to the tune of Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs). In a communication to lenders, including rural development banks and cooperative banks, the RBI has asked them to put in place a ‘mandatory leave’ policy as part of the prudent risk management measure.
“As a prudent operational risk management measure, the banks shall put in place a ‘mandatory leave’ policy wherein the employees posted in sensitive positions or areas of operation shall be compulsorily sent on leave for a few days (not less than 10 working days) in a single spell every year, without giving any prior intimation to these employees, thereby maintaining an element of surprise," the communication said. During the mandatory leave, the bank employee will not have access to any physical or virtual resources related to the work responsibilities, with the exception of internal/ corporate email which is usually available to all employees for general purposes.
The RBI, in its earlier guideline on the issue in April 2015, had not clearly specified the number of days for the mandatory surprise leave, though it said it could be “a few days (say 10 working days)". The central bank has updated the ‘mandatory leave’ policy for the employees posted in sensitive positions or areas of operation, and repealed the circular dated April 23, 2015.
Banks, as per a board-approved policy, have been asked to prepare a list of sensitive positions to be covered under ‘mandatory leave’ requirements and also review the list periodically. RBI has asked banks to comply with the revised instructions within six months.
As per the April 2015 circular, sensitive positions or areas of operations covered under the ‘mandatory leave’ policy include treasury, currency chests, risk modelling, and model validation. In a circular issued in 2011 on ‘Findings of Forensic Scrutiny- Guidelines for prevention of frauds’, banks were advised to immediately put in place ‘staff rotation’ policy and policy for ‘mandatory leave’.