CVC directs banks to report frauds of Rs 1 crore and above

The Central Vigilance Commission (CVC) has made it mandatory for the public sector banks to report to it all matters involving frauds of Rs one crore and above.

The move comes in the wake of rising number of high-ticket loan defaulters.

Based on the complaints received from the banks, four general manager ranked banking professionals hired by the anti-corruption watchdog would recommend whether CBI investigation can be ordered or not.

In 2015, the Central Bureau Investigation had probed 171 cases of bank frauds involving funds of Rs 20,646 crore. In addition to this, the national investigation agency is also investigating ponzi schemes involving funds of over Rs 1.20 lakh crore.

According to sources, the CVC will also call regular monthly meetings of senior officials of Reserve Bank of India (RBI), CBI and banks to monitor probe in suspected bank frauds of Rs 50 crore and above.

Furthermore, the banks have also been asked to share with the CVC their reports of Fraud Monitoring and Reporting (FMR) mechanism in the suspected fraud cases of Rs one crore and above.

“Till now this report was shared with the RBI only,” said TM Bhasin, Vigilance Commissioner-CVC.

“The banks will also now have to report the modus operandi of all the alleged frauds to the CVC which will share these details with other banks to ensure that systemic changes can be brought in to prevent such cases being repeated,” Bhasin added.

Earlier, frauds were being reported by the Central Vigilance officers of the banks to the RBI through the FMR mechanism. But now the CVC has decided that fraud of Rs 50 crore and above will be regularly.

“For this purpose, we will convene regular meetings where concerned people of CBI and RBI will be called and BSFC concerned banks,” Bhasin said.