Officers Skipping Mandatory Learning Expose Bank To Risks: Calcutta HC Upholds SBI Reimbursement Policy.

The Calcutta High Court has upheld the State Bank of India's decision to withhold certain reimbursements from officers who fail to complete mandatory learning programmes. The Court observed that employees who do not update themselves expose the bank to risks relating to money laundering and cyber fraud.

Justice Raja Basu Chowdhury, in a judgment delivered on June 18, dismissed a petition filed by the All India State Bank Officers Federation challenging SBI circulars issued in 2021 that linked reimbursement of certain expenses to completion of mandatory learning requirements.

“The circular does not appear to be unreasonable so as to shock the conscience of the Court. The petitioners are trying to take advantage of their own wrong. By not updating themselves, they are exposing the bank to security risks especially relating to money laundering and technological/cyber frauds. Despite the above the petitioners are bold enough to approach this Court to enforce a right to seek reimbursement of the expenses which is non-existent.”

The dispute arose after SBI linked reimbursement of expenses to completion of mandatory learning programmes. Officers who failed to complete the prescribed lessons became disentitled to claim those reimbursements.

SBI objected to the maintainability of the petition, arguing that the relevant records were in Mumbai and the circulars had been issued from there. The Court rejected the objection.

It held that the mere presence of records outside its jurisdiction was not enough to exclude its jurisdiction when the effect of the circulars was felt within its territorial jurisdiction.

The Federation argued that officers who did not complete the learning programmes already faced adverse consequences in appraisal and promotion processes. It contended that denial of reimbursements imposed an additional consequence.

SBI countered that reimbursement of expenses such as conveyance, newspapers, telephone and internet usage did not form part of its officers' service rules. The bank maintained that these benefits were granted through administrative circulars and could not be claimed as a matter of right.

The court noted that the reimbursements were not covered by the service rules and were granted through circulars issued by the bank. It also recorded SBI's stand that the benefits were discretionary in nature.

The court took note of SBI's case that continuous learning was necessary in view of technological developments in banking, anti-money laundering requirements and risks of cyber fraud. It noted that the learning programmes were intended to improve job knowledge and reduce operational risks.

The court further noted that the Federation had not challenged the rule empowering SBI to impose such conditions. Instead, it had challenged only the circulars implementing that rule.

“I find that the petitioners had not challenged Rule 65(A) of the SBIOSR. They are only interested to challenge the circulars based on which the aforesaid rule was implemented. In my view, unless the rule itself is challenged, the consequence of such rule cannot be impeached.”

Rejecting the argument that the policy violated Article 14 of the Constitution, the court held that officers who completed the mandatory learning requirements could not be equated with those who failed to do so.

“In the light of the above, it cannot be said that mandatory learning has no nexus with the object sought to be achieved for granting reimbursement of expenses. The members of the petitioners cannot at the cost of jeopardising the security of the customers of the bank seek to approach this Court for enforcement of a non-existent right. It is for this reason that the officers who have not updated themselves cannot be equated with those officers who have updated themselves. As such there can be no question of violation of Article 14 of the Constitution on such ground.”

Finding no merit in the challenge and holding that the circulars were not unreasonable, the court dismissed the plea.