Arun Jaitley spot on, on hounding bankers

It is welcome that finance minister Arun Jaitley has criticized the CBI’s conduct of naming the entire top rung of Indian banking as part of its preliminary inquiry into the charge against former ICICI boss Chanda Kochhar.

He might have messed up the Mahabharata analogy a little (the advice was not to go for the bull’s eye nor was it by Arjuna: Drona tells his princely disciples, all the young Kauravas, and the Pandavas, to learn from Arjuna, who saw only the neck of the bird he was given as the target while the others saw the entire bird, the tree, the woods, and the landscape) but the advice to focus on the essential target was spot on. Spray and Pray might be an efficient strategy in venture investing, but is not the way to go about prosecuting people.

When the loans in question were made, Videocon was not a defaulter. There was no reason for a loan sanctioning committee to not augment what was essentially a standard asset. This is where two things that Jaitley talks about make eminent sense: men's rea and admissible evidence of wrongdoing.

If there is evidence of financial gain to the Kochhars but none in the case of the other bankers who were part of the committee, why would the CBI drag every committee member into its investigation of malpractice?

The earlier arrests of bankers have not led to the conviction or even credible charges, only to the demoralization of senior bankers. At a time when banks are seeing better repayment of dues by companies, resolution of bad loans and injection of fresh capital by the government, enabling them to resume lending to fuel economic recovery, it does not help to scare bankers off decisions that could potentially put them in the crosshairs of ‘investigative adventurism’ and get their names dragged through mud.

The CBI is not obliged to heed Arun Jaitley. Nominally, it is under the supervision of the Central Vigilance Commission. The present case illustrates why this is a bad arrangement. Every police agency should be under the executive, but also made accountable to a committee of the legislature and to the human rights watchdog.

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