Reserve Bank of India Governor Urjit Patel on Thursday said preventive vigilance will work better than punitive vigilance in public sector institutions.
Preventive vigilance is the practice of studying an organisation and its policies and implementing measures so that they do not become vulnerable to corruption. Punitive vigilance occurs when a crime has already been committed. Here, the perpetrator is punished to deter others.
Punitive vigilance is tough in a public sector institution, Patel said. Since rewards are low to begin with, the possibility of “downward revisions” is limited, he said, according to PTI. He was speaking at a conference at the Central Vigilance Commission in New Delhi.
In most public sector institutions, a disciplinary action that hampers the perpetrator’s career progress is often the preferred punishment, he said.
“However, this has the misfortune of demotivating employees beyond the point of their career when punitive vigilance action is undertaken,” Patel said. “This could, in principle, be dealt with a ‘golden handshake’; however, the insurance that public sector jobs offer is often a key attractive feature of these jobs given the lack of significant upside financial rewards.” A golden handshake is a clause in an employment agreement saying the firm will give them a severance package if they are fired or lose their job in cases such as restructuring of the company.
Detective vigilance is also slightly ineffective, he said, as this does not necessarily lead to a reduction in incidences of lapses or violations. It may, however, help contain a lapse before it has been performed, in some cases, he admitted.
“In other words, while not taking away from the need to engage in some detective and punitive vigilance, preventive vigilance is conceptually likely to be the most effective governance mechanism at public sector institutions,” Patel said.
At the Reserve Bank of India, the Central Vigilance Cell does this job, he said. It liaises with the Central Vigilance Commission and the Central Bureau of Investigation.
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