The Indian Banks’ Association ( IBA ) has suggested setting up of an independent committee and to include a Reserve Bank of India ( RBI ) official as a part of the panel to scrutinise charges against bankers . The association is also contemplating buying insurance to ensure indemnity against frivolous charges by investigating agencies and protect against indiscriminate arrest of bankers.The demands came in the wake of the arrest of five Bank of Maharashtra (BoM) officials, including CEO Ravindra Marathe , by the economic offences wing of the Pune Police this week for allegedly colluding with real estate developer DS Kulkarni to divert money and cheat shareholders.IBA is also lobbying the finance ministry and will lead a delegation of bankers to the ministry next week with a memorandum seeking protection against unsubstantiated charges and ill-advised arrests of bankers in the recent past, chief executive officer (CEO) VG Kannan said.“All bankers, from the public and private sectors and foreign banks have unanimously expressed anguish and concerns that bonafide banking decisions are being questioned without any proof. We will take it up at the highest levels of the government and make suggestions so that these things do not happen again,” Kannan said addressing the press after an emergency meeting of the association.“No procedures were followed in these arrests. These officials were picked up, taken to the police station and arrested under the stringent Maharashtra Protection of Interest of Depositors Act (MPIDA) which is not concerned with a bank. There was no sanction taken as is required for the arrest of a central government employee. Also, RBI rules say that any loan case above Rs 25 crore has to be taken up by the CBI. Even this was not followed,” Kannan said.He said that the Pune Police added the bankers’ name to the MPIDA case involving DSK Developers after the builder defaulted on deposits taken from the public.“These deposits were owed to the public by the developer. It was not linked to the bank. They have added the bankers’ names without any investigation,” Kannan said. The IBA is now looking to pool in banking resources to buy insurance against frivolous action against bankers by investigative agencies. Another move will be to form a committee including retired bankers and RBI officials to ensure that charges against bankers are substantiated before being acted on by investigated agencies.IBA’s calls come even as an amendment to the Prevention of Corruption Act, which includes a clause seeking prior approval and adequate evidence before initiating investigation against public officials, is pending parliamentary approval. Bankers, especially from the public sector have been facing the heat from the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI) as these agencies look to pin the blame of record rise in non-performing assets (NPAs) on these lenders.Involvement of local police and additions of draconian non-bailable laws like the MPTDA are now making bankers nervous. “Bankers are feeling anguished and demoralised after the recent events. The arrest of the BoM officials is the straw that has broken the camel’s back. Bankers follow certain processes in granting loans and if all these decisions are questioned that will affect credit delivery which is critical for the functioning of the economy. It is not correct to just blame the bankers for the rise in NPAs,” Kannan said.BoM’s exposure to the DSK Group was just Rs 100 crore out of the total Rs 600 crore owed to a clutch of banks. The company was a borrower with the bank for more than 20 years and had encountered problems due to a downturn in the economy in 2015. BoM had also sanctioned a short-term loan of Rs 10 crore to the company which was backed by a property collateral of Rs 15 crore. The bank had already started recovery proceedings against DSK under the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act) and therefore the investigation against the executives looks hurried, Kannan said.