Vigilance

1. Overview of Vigilance

  • Aim: To ensure integrity and prevent corrupt practices in public service.
  • Approach:
    • Vigilance is proactive, not disruptive.
    • Protects honest employees from unjustified harassment.
    • Examines prudence in business decisions rather than punishing genuine mistakes.

2. Types of Vigilance

  • Preventive Vigilance:
    • Focus on avoiding misconduct rather than punishing lapses.
    • Example: Streamlining systems to reduce opportunities for fraud.
  • Punitive (दंडात्मक) Vigilance:
    • Taking disciplinary action against employees for proven misconduct.

3. Vigilance Machinery

  1. Chief Vigilance Officer (CVO):
    • Senior official, usually on deputation, oversees vigilance in the organization.
  2. Central Vigilance Commission (CVC):
    • Statutory body established under the CVC Act, 2003.
    • Consists of a Chairperson and two Vigilance Commissioners.
    • Supervises vigilance activities and investigates high-value corruption cases.
  3. Central Bureau of Investigation (CBI):
    • Investigates criminal breaches, corruption, forgery, etc., through its Special Police Establishment (SPE).

4. CBI’s Role and Process

  • Key Divisions:
    • Anti-Corruption Division, Economic Offences Division, and Bank Securities & Fraud Cell (BS&FC).
  • Cases Referred to CBI:
    • High-value frauds (Rs. 6+ Crore).
    • Interstate/international ramifications.
    • Complex cases requiring external inquiries.
  • Preliminary Enquiry (PE): Verification before registering a regular case (RC).

5. Advisory Board for Banking and Financial Frauds (ABBFF)

  • Established: By CVC in consultation with RBI (2021).
  • Purpose:
    • Examines frauds involving Rs. 3+ Crore in Public Sector Banks (PSBs).
    • Advises on criminality/malafide (बदनीयत) intent of officials.
    • Ensures fair decision-making before prosecution.

6. Fraud Risk Management

  • Guidelines for Reporting Fraud:
    • Below Rs. 6 Crore: Report to State/UT Police.
    • Rs. 6 Crore and Above: Report to CBI.
    • High-Value Frauds (Rs. 50+ Crore): CVO is the nodal officer for complaints.
  • Responsibilities:
    • CMD/MD ensures compliance with RBI timelines.
    • CBI monitors progress on banking frauds of Rs. 10+ Crore.

7. Disciplinary Actions and Prosecution

  • Types of Action:
    • Criminal Prosecution: Requires sanction under Section 19 of the Prevention of Corruption Act, 1988.
    • Departmental Action: Regular Departmental Action (RDA) for major or minor penalties.
  • Sanction for Prosecution:
    • Bank’s Competent Authority decides within 30 days of receiving CBI’s report.
    • Disagreement with CBI recommendations must be referred to CVC for review.

8. Key Provisions of the CVC Act, 2003

  • Jurisdiction: Covers PSBs, financial institutions, and employees involved in corruption cases.
  • Powers:
    • Supervise investigations of corruption cases by the CBI.
    • Conduct inquiries into complaints against public officials.

9. Bank-Specific Measures

  • Fraud Prevention:
    • Employee rotation to prevent familiarity risks.
    • Surprise audits and reconciliation of accounts.
  • CBI’s Recommendations:
    • Transfer or suspend employees under investigation.

10. Important Terms

  • CVO: Chief Vigilance Officer.
  • CVC: Central Vigilance Commission.
  • ABBFF: Advisory Board for Banking and Financial Frauds.
  • PE: Preliminary Enquiry.
  • RC: Regular Case.

MCQ

1. What is the primary aim of vigilance in an organization?
a) To identify mistakes in business decisions.
b) To ensure punishment for all losses.
c) To prevent corruption and ensure integrity.
d) To monitor daily operations.

Answer: c) To prevent corruption and ensure integrity.

2. Vigilance activity focuses on:
a) Disrupting operations to find misconduct.
b) Proactive measures to prevent fraud.
c) Punishing all employees involved in losses.
d) Regular employee transfers.

Answer: b) Proactive measures to prevent fraud.

3. Who is responsible for overseeing vigilance in an organization?
a) Chief Financial Officer
b) Chief Vigilance Officer (CVO)
c) Central Vigilance Commissioner
d) Zonal Manager

Answer: b) Chief Vigilance Officer (CVO)

4. The Central Vigilance Commission (CVC) was established based on the recommendations of which committee?
a) Santhanam Committee
b) Narasimham Committee
c) Malhotra Committee
d) Mitra Committee

Answer: a) Santhanam Committee

5. Which act provides statutory status to the Central Vigilance Commission?
a) Prevention of Corruption Act, 1988
b) Central Vigilance Commission Act, 2003
c) Banking Regulation Act, 1949
d) Companies Act, 2013

Answer: b) Central Vigilance Commission Act, 2003

6. The CBI’s Special Police Establishment derives its powers from which act?
a) Indian Penal Code, 1860
b) Prevention of Corruption Act, 1988
c) Delhi Special Police Establishment Act, 1946
d) CVC Act, 2003

Answer: c) Delhi Special Police Establishment Act, 1946

7. Which CBI division handles banking and securities-related frauds?
a) Economic Offences Division
b) Anti-Corruption Division
c) Special Crimes Division
d) Bank Securities & Fraud Cell (BS&FC)

Answer: d) Bank Securities & Fraud Cell (BS&FC)

8. High-value frauds involving amounts of Rs. 50 Crore or above must be reported to:
a) RBI
b) CVC
c) CBI
d) Police Department

Answer: c) CBI

9. Fraud cases below Rs. 6 Crore must be reported to:
a) CVC
b) State/UT Police
c) CBI
d) Zonal Head

Answer: b) State/UT Police

10. Which board examines frauds involving Rs. 3 Crore or more in Public Sector Banks?
a) Central Vigilance Commission
b) Advisory Board for Banking and Financial Frauds (ABBFF)
c) Fraud Monitoring Board
d) RBI Oversight Committee

Answer: b) Advisory Board for Banking and Financial Frauds (ABBFF)

11. What is the timeline for the bank to decide on a CBI request for prosecution sanction?
a) 15 days
b) 30 days
c) 45 days
d) 60 days

Answer: b) 30 days

12. Regular Departmental Action (RDA) is recommended when:
a) Criminal prosecution is warranted.
b) Evidence is insufficient for prosecution but indicates misconduct.
c) The employee is found innocent.
d) The fraud exceeds Rs. 50 Crore.

Answer: b) Evidence is insufficient for prosecution but indicates misconduct.

13. Suspension of employees under investigation by CBI is:
a) Mandatory in all cases.
b) Recommended based on CBI’s request.
c) Decided by the RBI.
d) Done after approval from Zonal Heads.

Answer: b) Recommended based on CBI’s request.

14. What is the maximum time allowed by the Supreme Court for granting or denying prosecution sanction?
a) 2 months
b) 3 months
c) 6 months
d) 1 year

Answer: b) 3 months

15. Who appoints the Central Vigilance Commissioner?
a) Prime Minister
b) Chief Justice of India
c) President of India
d) RBI Governor

Answer: c) President of India

16. The Central Vigilance Commission has jurisdiction over:
a) Private companies only.
b) Public Sector Banks and financial institutions.
c) Judiciary employees.
d) State police forces.

Answer: b) Public Sector Banks and financial institutions.

17. What is the tenure of the Central Vigilance Commissioner?
a) 2 years or age 65, whichever is earlier.
b) 3 years or age 65, whichever is earlier.
c) 4 years or age 65, whichever is earlier.
d) 5 years or age 65, whichever is earlier.

Answer: c) 4 years or age 65, whichever is earlier.

18. Section 19 of the Prevention of Corruption Act deals with:
a) Rules for CBI investigations.
b) Granting sanction for prosecution.
c) Filing preliminary enquiries.
d) Suspension of accused employees.

Answer: b) Granting sanction for prosecution.

19. Under the Prevention of Corruption Act, prosecution sanction is required for:
a) All criminal offences.
b) Corruption-related offences by public servants.
c) Fraud cases below Rs. 1 Crore.
d) Offences against private employees.

Answer: b) Corruption-related offences by public servants.

20. Which document must be submitted to CBI during investigation referrals?
a) Original files only.
b) Certified copies of relevant documents.
c) Verbal confirmation from bank officials.
d) Internal reports without external verification.

Answer: b) Certified copies of relevant documents.

21. Employee rotation in banks is a measure of:
a) Preventive Vigilance.
b) Punitive Vigilance.
c) RDA recommendations.
d) CBI investigation.

Answer: a) Preventive Vigilance.

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