CVC asks banks to report frauds of ₹1 cr and above

With several high-ticket alleged frauds coming to the fore, the Central Vigilance Commission has now made it mandatory for public sector banks to report to it instances involving over ₹1 crore.Based on the reports, the anti-corruption watchdog, which has hired four officers of General Manager rank from banks as advisors, will recommend whether a CBI probe can be ordered.1556-money-bag

According to CBI data, in 2015, the agency had probed 171 cases of bank frauds involving ₹20,646 crore. In addition, the CBI is investigating Ponzi schemes involving over ₹1.20 lakh crore.

The Commission will also call regular monthly meetings of senior officials of Reserve Bank of India, CBI and banks to monitor probes in suspected bank frauds of ₹50 crore and above.The banks have been asked to share their reports of Fraud Monitoring and Reporting (FMR) mechanism with the CVC in suspected cases of ₹1 crore and above.Till now this report was shared only with the RBI, Vigilance Commissioner TM Bhasin said.

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 in order to ensure that systemic changes be brought in to prevent repeat of such cases, he said.

2124-banker“Frauds were being reported by the Central Vigilance Officers of the banks to the RBI through the Fraud Monitoring and Reporting mechanism. Now the Commission has decided that frauds of ₹50 crore and above will be regularly followed up by the CVC,” Bhasin said.

The move follows the difference in the definition of “fraud” by banks and investigating agencies. The CBI had complained that banks were not forthcoming with reporting of frauds to it.



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