Increasing bank frauds disturbing CBI

CBI director A P Singh has expressed serious concern over the increase in bank frauds every year in the country.

Addressing a meeting of the Chief Vigilance Officers (CVO) of 30 public sector banks, financial institutions and CBI officers at the CBI headquarters on Friday, he said that the banking sector had lost around Rs 3,799 crore in 2010-11 alone due to frauds.

“The increasing amount of frauds in the banking sector is a disturbing factor. CBI Bank Securities and Fraud Cell registered criminal cases worth Rs 4,000 crore in 2011. Cases regarding frauds worth Rs 2,500 crore have already been registered between January and June in 2012. In 2009-11, banking sector lost Rs 2,017 crore due to fraud and the amount increased to Rs 3,799 crore in 2010-11,” Singh said.

Delivering a speech on ‘preventing bank frauds with systematic intervention’, Singh said that CVOs should sensitise their respective banks to give sanction for prosecution of public servants promptly as undue delay send wrong signal to persons engaged in corrupt activities.

He added that the highly-disturbing number of fraud cases and the amount involved clearly suggest that a comprehensive system of checks and balances is required.

He asked the banks to co-operate with the CBI to avoid sending a wrong signal to those engaged in corrupt activities.

“Existing loopholes need to be plugged, manuals updated and standard operating procedures framed to ensure that lending and borrowing takes place in healthy environment, free of fraud,” Singh said.

Singh said that CBI is developing a Bank Case Information System (BCIS) which contains names of accused persons, borrowers and public servants on the records of the bureau.

This information may also be made accessible to field functionaries of the banking sector in collaboration with the Indian Bank Association (IBA).

“On the request of the CBI, the CVC has notified revised threshold limits for reporting the bank fraud. The CBI can only register bank fraud cases involving the loss above `3 crore. Frauds below `3 crore would be reported to the state police. The CBI’s role is to investigate criminality of bank frauds such as cheating, criminal conspiracy, forgery, concealment, abuse of official position etc. It does not interfere in cases where commercial decisions involving risks have resulted in losses,” Singh said.