Govt orders forensic audits at OBC, Dena Bank over Rs 436-cr FD scam

Written by fe Bureau | Mumbai | Updated: Aug 21 2014, 09:48am hrs
The Finance Ministry has ordered forensic audits at Oriental Bank of Commerce (OBC) and Dena Bank, following reports of misappropriation of R436 crore worth of fixed deposits at branches of the two banks, banking secretary GS Sandhu said on Wednesday.

Talking to reporters on the sidelines of Naredco Real Estate and Banking Conclave, Sandhu said, These are instances which have happened at the branch level, owing to lack of due diligence and non-adherence to norms and procedures. Forensic audits have been ordered and are currently going on.

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He, however, said it is not fair to say the entire banking sector or the individual banks are moving in that direction (misappropriation). People responsible are being taken to task. Some suspensions have already happened along with some transfers. Investigations are on and based on that further steps will be taken, Sandhu said. According to a media report, a Dena Bank branch manager mobilised fixed deposits (FDs) worth R256.4 crore from seven corporates using middlemen. It also pointed out that misappropriation of R180 crore was

reported in case of OBC. The cases have been referred

to the Central Bureau of

Investigation (CBI), the report said.

Sandhu told reporters that that government is going to make it mandatory for all senior officers in banks of deputy general manager (DGM) or general manager (GM) levels to undergo a compulsory risk management course before they are considered for their promotions for higher posts.

Public sector banks have recently been embroiled in controversies. A banks chairman was arrested by the CBI on allegations of accepting R50 lakh for credit extension to corporates.

RBI deputy governor SS Mundra said, There are instances of individual failures. We would look into it.

Shares of OBC were

down close to 5% before ending the day's trade at R264.50, down 3.4% on the BSE. On the other hand, Dena Bank tanked 5.5% during the day and marginally recovered to R60.10, down 5% from its previous close.