Banks Board Bureau (BBB), the makeover platform set up by the NDA government to help state-owned banks build up their human resource, will effectively close down in March.
The term of its chairman, Vinod Rai, who was at one time expected to advise the government on how to "enforce a code of conduct and ethics for managerial personnel (sic)" in these banks, comes to an end simultaneously.
Over the weekend, as the Punjab National Bank (PNB) moved its general manager (human resources) out of his role, the almost parallel eclipse of the bureau demonstrates why scams like the one involving Nirav Modi occur repeatedly in banks.
From the early 2000s, PNB and other large state-owned banks like the Bank of Baroda have halved their in-service training for probationary officers to about a year from 24 months.
India's second-largest government-owned bank has not sent its treasury and forex operations personnel for refresher training for more than two years. Such a state of affairs is not unusual in most of these banks. "It isn't that these officers don't know their job. However, exchange of information at training programmes builds back-up officers," said a high-level official at the bank, on condition of anonymity.
On Friday, to its detriment, the bank found this to be true as it raised the level of checks on their forex operations, which are now to be routed through one more layer of management. It scrambled to locate officers who could move in immediately to fill the vacancies.
The BBB was set up two years ago in February 2016 by the Centre under Rai, the former Comptroller and Auditor General of India, to address these deficiencies.
It included the secretary, department of financial services in the finance ministry, and a deputy governor of the Reserve Bank of India, besides other top-level bank officials.
However, it never got going except to choose executive-level posts in banks. Even those were delayed. The BBB apparently chose Rajnish Kumar as State Bank of India's (SBI's) then chairman Arundhati Bhattacharya's successor in July 2017 but the decision was announced by the finance ministry on October 6, 2017, just four days before she retired.
While the post of managing director in the same bank was cleared some months ago, it has yet to be announced. The finance ministry, wary of sharing its role in managing the officers of public sector banks, has apparently refused to engage with the Board.
Incidentally, BBB had also suggested eligibility criteria for filling up the role of chartered accountant directors in these banks, some of whom are often selected for their closeness to the parties in power.
The government is yet to respond. The government has, however, made online the process of receiving applications for these posts.
Data from the PNB annual report show the average time spent by its officers in training has been just six man-days in FY17.
To its credit, the bank has built up a well-equipped institute of information technology and has central- and regional-level training centres. The training programmes for smaller banks (typically mid-level and small state-owned banks) are more abysmal. A senior SBI officer confirmed that loan appraisals made by them are routinely collected by officers from these banks and then reappear only with the letterhead changed.
Biswajit Nag, an associate professor at the Indian Institute of Foreign Trade, estimates that it takes at least 30 continuous classroom hours for officers to become well-equipped in handling documentation, logistics, and the financing aspects of foreign trade.
Banks rarely have the time to send their officers for even half that time. Rajesh Chakrabarti Professor, Finance and Executive Vice Dean at the Jindal Global School, said, "If one includes issues of ethics in the curriculum, the time taken has to be longer."
The BBB was tasked by the government to "build a databank containing data relating to the performance of PSBs/FIs, its senior management and the board of directors and share the same with government".
It was also supposed to "help banks to develop a robust leadership succession plan for critical positions that would arise in future through appropriate HR processes, including performance management systems".
All this target one Question... what was BBB doing all this years.