Jaitley calls for graft law changes to stop witch hunt of bankers

Bankers have been complaining of harassment by investigating agencies for decisions made by some others years ago. The Indian Banks Association has made representation to the government against the recent arrest of Bank of Maharashtra officials by local police in Pune.

Without naming the incident, Jaitley went on to say that in a federal structure the state police cannot investigate central government functionaries.

“We cannot overlook the federal structure of India in dealing with crimes,” Jaitley said at the fifth State Bank of India Banking & Economics Conclave in an address through video link. “Law and order is a state subject. If state police are allowed to investigate central agencies, it would disbalance the whole system.”

“We need a certain level of statesmanship by both central and state agencies. Activism by state agenices should come with restraint. We need to put an entire relationship in place,” he said. Jaitley is currently recuperating after a kidney transplant.

“It (POCA) was a pre-1991 piece of legislation… it was one of the most badly drafted laws,” Jaitley, who is the first one from government to speak on the issue, said.

“It creates a legislative system where even bonafide decisions in a post-mortem done after 10 years are found to be erroneous and people are held accountable,” he said.

Jaitley who was till recently the finance minister since the present NDA government came into power, but recently moved out due to illness, continues to be minister in the government though without any portfolio.

He said it is important to amend the POCA to bring it in tune with the modern times of decision making.

“If that was not done, I would not join the chorus of blaming any decision maker or banker for any delay in decision making,” he said.

There has been a number of cases of bankers been named by investigating agencies long after their retirement. Like last week, the Central Bureau of Investigation filed chargesheet against two former Canara Bank chairman and managing directors (CMD), AC Mahajan and S Raman for cheating the bank. While Mahajan retired from Canara Bank in July 2010, Raman retired in September 2012.

Indicating the recent arrests of Bank of Maharashtra officials, Jaitley questioned whether state government police should investigate the decisions taken by central government agencies.

“If the state police were allowed to investigate centre (central govt officials) it would completely upset the federal balance…. otherwise you will have a minister, a cabinet secretary or secretary of central government or director of RBI or Sebi being investigated by sub-inspectors of the state police,” he said.

Jaitley warned that threat to federalism comes from the state and such events could paralyse the decision making process.

“There can be situations including the one that I am obliquely indicating at where the threat to federalism comes from state and not from centre…We may get sadistic pleasure against it quoting precedents but it will have paralysed a decision making process,” he said.