CBI probing 292 fraud cases in 44 banks: Govt

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Mumbai | Published: April 5, 2018 12:58:54 AM

The Central Bureau of Investigation (CBI) is probing 292 cases of scams and frauds involving 44 banks, according to a reply by minister of state for finance Shiv Pratap Shukla to a Rajya Sabha question.

CBI, fraud cases, banks, commercial banksThe Central Bureau of Investigation (CBI) is probing 292 cases of scams and frauds involving 44 banks, according to a reply by minister of state for finance Shiv Pratap Shukla to a Rajya Sabha question.

The Central Bureau of Investigation (CBI) is probing 292 cases of scams and frauds involving 44 banks, according to a reply by minister of state for finance Shiv Pratap Shukla to a Rajya Sabha question. The list of banks includes 32 scheduled commercial banks (SCBs), 10 cooperative banks, the Small Industries Development Bank of India (SIDBI) and Export Import (EXIM) Bank of India. The set of SCBs includes four of the subsidiaries of State Bank of India (SBI), which now stand merged with the country’s largest bank. The largest banks named in the list are SBI, ICICI Bank, Axis Bank, Punjab National Bank and Bank of Baroda. Last month, FE had reported that public sector banks have penalised employees in more than 5,000 instances between January 2015 and March 2017 for wrongdoing, with more than half of them being in 2015, based on the government’s reply to a question in the Parliament. Action taken includes employees convicted, awarded major or minor penalties, including being dismissed from service. Instances of bank fraud have come under heightened public scrutiny amid the unearthing of Rs 12,300-crore fraud at PNB and reports of frauds at other PSBs. In 2015, the Reserve Bank of India (RBI) had issued guidelines on Red-Flagged Accounts (RFA) to enable banks to detect and report frauds early and take timely actions like reporting to the investigative agencies, examining staff accountability and do effective fraud risk management. A red flagged account (RFA) is the first step towards identifying fraud and could be applicable to both a standard loan – where the interest is being paid regularly – or a bad asset – one where the borrower has defaulted. An account is typically classified as RFA if the borrower defaults on payments, or if high-value cheques bounce, or the company is raided by the tax authorities – the income tax, sales tax or central excise departments. Moreover, frequent changes in the scope of the project to be undertaken by the borrower also prompts lenders to red-flag the account. Further, funds coming from other banks to pay off existing dues is also viewed suspiciously.

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