Rajya Sabha passes amendments to anti-corruption law.

The legislation is aimed at helping bankers take business decisions without fear.

In a move aimed at providing relief to bankers and helping them take business decisions without fear, the Rajya Sabha on Thursday passed the Prevention of Corruption (Amendment) Act, 2013.

It comes at a time when bankers are facing intense scrutiny for their lending decisions with many former and current bankers arrested by investigative agencies over loans that have now turned non-performing. Bankers have been awaiting the amendments for a long time and have argued that they should not be prosecuted for lending decisions made honestly.

According to the amendments, a police officer will now have to take prior permission from appropriate authorities while pursuing cases. Further, bankers cannot be pulled under the corruption law unless they have accumulated assets disproportionate to their income or have misappropriated assets entrusted to them.

“The amendment to Prevention of Corruption Act is a welcome development and brings comfort to bankers who have discharged their duties in a bona fide manner,” said Rajnish Kumar, chairman, State Bank of India.

The Prevention of Corruption (Amendment) Bill, 2013 amends the archaic Prevention of Corruption Act, 1988. The bill will now go to the Lok Sabha for the Lower House’s nod.

According to the provisions of the bill, criminal misconduct will now include only two offences—misappropriating of property entrusted to you as well as amassing assets disproportionate to known sources of income. Earlier, the Act also defined criminal misconduct to cover offences including abuse of position, use of illegal means and disregard of public interest, according to a note by think tank PRS Legislative Research.

“The need for prior permission from an appropriate authority before pursuing investigations works in favour of the bankers,” said a person familiar with the development. “Further, the amendments propose to narrow the scope of what will constitute criminal misconduct, which will again be beneficial for bankers,” the person added.

“Under the older law, even providing a pecuniary advantage is a criminal misconduct. By that definition, even a loan given by a banker can be defined as providing pecuniary advantage,” the person mentioned above said.

Last month, the Pune Police arrested Bank of Maharashtra managing director and CEO Ravindra Marathe, besides other officials, in an alleged Rs.2,000 crore scam, involving real estate developer D.S. Kulkarni. The arrests drew criticism from the Indian Banks’ Association, which condemned what it saw as the high-handedness of the probe agencies in the alleged fraud. It said the provisions of the law under which the arrests were made do not apply to banks. There have been many other instances of probes against bankers—both serving and former—including one against former IDBI Bank executives Kishor Kharat and Melwyn Rego over a ₹600 crore loan to C. Sivasankaran’s firms and another against former Canara Bank chairman and managing director S. Raman in a case relating to Winsome Diamonds.

In his reply to the debate, Jitendra Singh, minister of state in the ministry of personnel, grievances and pensions said that on the one hand, the law against corruption has been made broad-based and on the other, protection and safeguards of the functionary have been made more effective.

He added that protection will now be available to all the public servants. “It was earlier available only to the post of joint secretary and above. Now it is available to all,” he said.

Anand Sharma, deputy leader of the opposition in the Rajya Sabha pointed out that no Lokpal has been appointed by the Narendra Modi government and that the provision of taking prior permission from Lokayuktas or Lokpals for proceeding against public servants has become a non-starter. Instead, it will be preferable if the power to grant permission lies with the government, he said. (Source: Livemint)