The probe into the Rs 300-crore Citibank fraud widened on Monday with the Gurgaon Police seeking Reserve Bank of India?s (RBI) assistance to ascertain whether systemic failures within the bank had perpetrated the fraud or not.
Following the investigation, if the RBI?s report acknowledges that basic banking rules were flouted then top officials of the Gurgaon branch of Citibank could also be arrested on the grounds of cheating customers, a police official investigating the case told FE.
Last week Sanjeev Aggarwal, managing director, Helion Advisors, had filed an FIR with the police against the senior executives of the Citibank. He argued that a scam of this magnitude could not have been the handiwork of only one person. ?Based on the FIR, the RBI will decide whether banking laws were violated. In which case other senior officers of Citibank (Gurgaon branch) could be arrested,? the police official said.
As earlier reported the RBI is already doing a special scrutiny of its regulatory procedures following the fraud at the bank?s Gurgaon branch, with the idea of fine-tuning or changing its system if needed. It will conclude its investigations within a week. As things stand, the RBI may not take a strict stand on regulating foreign banks but possible changes may be considered.
Besides senior officials of the bank, Aggarwal also named Indian-born global CEO of the Citibank Vikram Pandit and chairman William R Rhodes in the FIR that alleged criminal breach of trust, falsification of accounts, cheating and criminal conspiracy by the bank officials. Citibank, however, dismissed allegations of involvement of its senior executives in the fraud.
The local police has, however, ruled out the possibility of questioning Citibank?s global CEO Vikram Pandit and other top honchos in connection with the scam.