Leaving a PSU Bank Job: Can Past Loan Decisions Affect My Future in Railways?

I have resigned from a PSU bank through the proper channel as I got selected in Railway Department. While serving in the bank, I have recommended some loans and want to know if these loans become bad, such as NPA, then what can be the consequences?

After leaving a job, can departmental action be initiated against the ex-employee? If yes, then what can be the consequences, and will it affect my future job?

Dear Mr. Deepak Kumar,

Please verify the service rules of your bank regarding departmental action for the recovery of a loan recommended by you while in service. Disciplinary action cannot be taken against you since, after relieving from the bank service, there will be no employer-employee relationship.

Regards,
N. Nataraajhan
Sakthi Management Services
HP: +91 94835 17402
E-mail: natraj@sakthimanagement.com

Can Departmental Action Be Taken After Retirement?

This question can be answered by stating that there is no employee-employer relationship and the departmental relationship has ceased, so no action is possible.

However, on the other hand, if an employee commits a wrongful act intentionally causing loss, he can be taken to court by the previous employer even after he retires or quits. Otherwise, employees might engage in fraudulent activities and leave before it is discovered.

It is advisable to review your bank's rules to determine if any departmental action had commenced before retirement, etc.

You are morally responsible to attend the proceedings and justify the sanction of the loan. You can be queried/called for interrogation, but I am not sure of the legality of departmental action. Also, since you have resigned and joined another government organization through the proper channel, you are still accountable and responsible for your actions done in the previous organization and are liable to provide justification for your actions.

Deepak and others, we should strive hard to leave behind memories in the minds and hearts of people and should never carry fear to your next assignment. Have all the loans issued been verified properly? Make a list of doubtful cases at least now and alert all concerned. Best of luck.

Responsibility in Debt Processing

The poster is not the sole officer responsible for processing debts. There are other supervisory staff also in the chain. Is he the sole person to verify? He needs to take all factors into consideration. Full facts are not presented here. If the action had been negligent, malafide, or tainted by other considerations, then the law can act against the person.

On the other hand, if due diligence as per his bank rules has been done, then he need not fear any investigation. He should not, on his own, submit any list of doubtful debts at this stage. If he fears departmental action, he needs to talk to his lawyer - the whole picture can be discussed between lawyer-client, including the fact that he still is a Government servant. Our advice is based on his one-paragraph post.

Thank to all for your help. I was the recommending officer, and the manager was the sanctioning authority. Will this incident pose a problem for me in my new job? Can this lead to my termination if the matter escalates significantly?

I am sure you must have recommended the loans based on study, review, and cross-checks, such as financial statements and financial projections. Banks have laid down procedures for recommending loans. Have you followed the procedure? No one can predict what will happen if loans were found to be recommended without due diligence and violating bank procedures. If you have done due process/diligence, then put this worry out of your mind and focus on your new job. Loans can become bad due to other reasons, such as commercial or economic situations.

As Natrao has rightly said, if you have done your due diligence while recommending the loan, you need not worry. Loans can turn bad over a period of time for any reason or situation, which cannot be a cause for a departmental inquiry since it was not intentional.

If the loan recommendation was made without following the procedure or due diligence, or if the recommendation was intentional by violating the laid-down procedure or due diligence by the bank, then the bank can proceed with legal action against you.