As Hemindra Hazari, a Sebi-registered independent research analyst, has pointed out in his report, “Bank boards have clear-cut policies on the approval powers of all the staff, which have to be followed. As the CEO and ED report to the board of directors, they have to be in compliance with powers delegated to them by the board. Any staff exceeding his/her powers and not getting it approved by the seniors is considered a major offence.”
In fact, the bank’s statutory auditors flagged the issue and went to the extent of saying that the amount may be recoverable from the directors concerned.
But that’s not all. Earlier, the appointment of a DGM who was part of the senior management was also not ratified by the board, and he had to resign within three months. Within days, he was re-appointed at a lower level – AGM – as it did not require the board’s approval, noted Hazari.
