1. IBA looking for forensic auditors to check bank frauds

IBA looking for forensic auditors to check bank frauds

Worried over rising cases of fraud in the banking sector, Indian Banks' Association is looking for reputed CA firms to undertake forensic audit of banks with a view to recover money and curb such practices.

By: | New Delhi | Published: April 11, 2017 5:37 PM
It is to be noted that a forensic audit was ordered into the alleged irregularities in outward foreign remittances to the tune of about Rs 6,000 crore from a Bank of Baroda branch. (Reuters)

Worried over rising cases of fraud in the banking sector, Indian Banks’ Association is looking for reputed CA firms to undertake forensic audit of banks with a view to recover money and curb such practices. As part of the forensic audit, shortlisted Chartered Accountant firms will have to book debt analysis, credit appraisal, documentary analysis in foreign trade, foreign trade finance mechanism and SWIFT (remittance) trail tracking tools.

It is to be noted that a forensic audit was ordered into the alleged irregularities in outward foreign remittances to the tune of about Rs 6,000 crore from a Bank of Baroda branch.

Besides, such firms are required to employ email cracking tools voice interpreter, mobile call interpreter, big data analysing tools and lie detecting machine.

Preferably the firm should be empanelled or worked with regulatory bodies like CBI, SEBI, SFIO, EOW of State Police etc, IBA said in a public notice.

Indian Banks’ Association (IBA) invites applications from eligible Chartered Accountant firms for empanelment to take up assignments relating to forensic audit of frauds up to Rs 50 crore and frauds above Rs 50 crore in the banking industry, it said. “The last date for receipt of applications at IBA is April 25,” it added.

According to a senior bank official, the move will help banks form a panel of auditors to give them a clue for recovering bad loans. “Since the fraud cases involve the entire spectrum, including foreign banks, so this was very much required,” the official said.

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It will also help consortium lending as lenders can jointly appoint an auditor for particular account, the official added.

As per the criteria, firms conducting forensic audit over Rs 50 crore should have an overall exposure in the area for 10 years.

The gross NPAs of public sector banks have risen to Rs 6.06 lakh crore in December 2016, from Rs 5.02 lakh crore at the end of March 2016.

Last week, the Reserve Bank had said even though there have been a few positives on the bad loans front, the current level of dud loan resolution is untenable as there has been a deterioration in the NPA situation, and promised new measures to tackle the pain.

“The present level of NPA resolution is untenable,” RBI Governor Urjit Patel said while addressing the media at the customary post-policy presser.

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