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Window  Dressing in Banks  -  Dishonest Officers Get Promotion; CMDs and EDs Get Monetary  Benefits BUT  Honest Officers / Staff Get Lower Salary Increases

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Danendra Jain


Senior bank officials working as Branch Head or Regional Head or Circle Head or Zonal Head or Central Head, all have barring some exceptions resorted to window dressing in the past and it is their mastery in art of window dressing that they continued to be blessed with one after other promotions superseding honest performers.

They not only resorted to window dressing for deposits but also for advances.RBI never took notice of it or one may say that they indirectly supported this unhealthy and unethical practice prevalent in public sector banks in the name of achievement of targets.

Bank officers paid abnormal rates of interest for short term deposits and achieved the target of deposits. Bankers then motivated high value borrowers to withdraw their unavailed portion of sanctioned limit on closing days and park the same in their deposit account. In this way they made artificial jump in deposits and advances in last few days of closing year or closing quarter.

This fraudulent method of achieving target jeopardized the career of hundreds of senior officers who did not resort to window dressing and these officers were sidelined, posted at critical places and finally rejected in all promotion processes. There have been hundreds of senior officers who are expert in window dressing of advances too. They arrange short target valued clients to avail short term loan even if the corporate do not need and finally compensate them in different ways.

These corrupt bankers have caused huge loss to banks by paying abnormal interest for short period and by providing sub-PLR rate on advances to big clients who obliged them during closing period. All this caused huge loss to tax payers, investors and those who kept their hard money in saving deposits. Not only this these officers played big role in creation of bad assets in banks and finally writing off of big values loans .Volume of NPA was always concealed by these clever bankers and now on CBS they are getting exposed . Gross NPA of banks has made a new top and gone beyond control.

Finally when bank incurred loss or earned less profit, even wage revision of staff was treated by Ministry in casual manner and ultimately all staff had to bear with nominal or negligible rise in their wages.

Who will after all punish these corrupt officers who have been using their flattery and bribery powers to buy the good wishes of ministers and RBI officials and who have been buying even vigilance officials to close their files related to corrupt activities?

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After all why RBI officials and Ministry of Finance maintained silence for decades together is a mystery? Most of senior banks have got blessing of some ministers or some officers in MOF or RBI and this is why they not only get before-time promotion but also get safe exit at the time of retirement even if they committed hundreds of irregularities in their posting at various offices.




PS by Rajesh Goyal :   Mr Jain in the above article has summed up a kind of fraud which is going in banking industry for years.   RBI and Finance Ministry have not taken any action against any CMD or top officials during all these years.  They are very well aware of these malpractices which breed corruption but they have chosen to remain silent except for issuing a routine circular that banks should not indulge in window dressing.  This is similar to our corrupt politicians who give long speeches in the Parliament that we need to root out corruption from the society.   RBI and Finance Ministry are part of this scam.   Now it is openly being discussed in the public.   In an article titled " Public Banks Face Cap On Costly Year End Deposits", it is mentioned that "In the just concluded financial year, banks raised nearly a third of their total deposits in the last month of the year".    The article further says
"..It appears that in order to garner deposits and increase balance sheet size, banks tend to raise deposits and certificates of deposits at very high rates....Mobilization of such deposits unsustainably high rates, is not only likely to adversely affect the profitability of banks but also the asset liability management of bank," said a note sent out by finance ministry seeking views of public sector banks on the proposal".  


The ET articles also says "The interest rates on certificates of deposits, or CDs, the instrument used by banks to raise bulk or wholesale deposits, rose to a maximum of 11.5% by March, over 150 basis points from the end of December".  This kind of window dressing is clearly against the retail depositors, who even on 1 to 10 years deposits get around only 9%.   No PS Bank paid more than 9.5% even during the period when rate of interests have peaked.  The faithful all-weather customers, including senior citizens are denied the highest rate of interest, which is paid to corporate and some government deposits.   To garner government deposits, bribe is paid at various levels even by almost all PS bank officers, as senior officers in government departments are well aware that dishonest bank officers need these to get promotions and such dishonest officers can afford to pay for procuring such deposits.  


Can any CMD or ED or GM can say that he / she is not aware of such practices.  Rather they openly encourage such practices in meetings and praise such officers who have been able to get such deposits / loans.  It is sad commentary on the part of Indian banking.  I can only hope that after some cleaning in the promotion policy guidelines recently, RBI and Ministry of Finance will come together and punish those who indulge in such practices to earn monetary benefits and remain in good books of senior officers / ministry officials.