FinMin asks banks, financial institutions for prompt reporting of vigilance matters

The finance ministry has instructed public sector banks, insurers, and financial institutions to swiftly disclose vigilance-related information pertaining to their whole-time directors (WTDs).

This directive from the Department of Financial Services (DFS) addresses multiple instances where critical findings about board-level appointees faced reporting delays. Numerous cases revealed that adverse inputs—including citizen complaints, judicial observations, or investigative agency references—were disclosed only when formally seeking Vigilance Clearance from Chief Vigilance Officers (CVOs).

The ministry noted some organizations excluded vital WTD-related information from clearance documentation, citing the absence of dedicated disclosure fields.

Emphasizing that withholding material information—particularly concerning appointments, promotions, and executive placements—constitutes a serious breach, the advisory mandates strict adherence to reporting protocols.

DFS now requires immediate reporting of adverse findings involving board officials, even if allegations stem from non-executive roles.

Institutions must also submit exhaustive vigilance disclosures incorporating court/tribunal directives, internal inquiry outcomes, significant audit objections, and official communications from any government body.

CVOs bear responsibility for ensuring real-time accuracy of vigilance clearances, with explicit instructions against withholding relevant information.

Earlier this year, authorities relegated Union Bank of India Executive Director Pankaj Dwivedi to General Manager at Punjab & Sind Bank. This unusual demotion followed ongoing Delhi High Court proceedings alleging procedural violations during his executive appointment due to incomplete vigilance clearance documentation.

Published on December 28, 2025