Mumbai: In a recent communication to all commercial banks, the Reserve Bank of India (RBI) said some banks have not been strictly following instructions, particularly in connection with record-keeping of cash deposits and withdrawals of Rs 10 lakh and above.

The RBI also mentioned that managers are not closely monitoring cash withdrawals for large amounts and are not regular in reporting such transactions to the controlling offices.

The RBI has asked all commercial banks to ensure that no new accounts are opened by banned organisations and advised them to strictly adhere to guidelines of opening and monitoring accounts. The central bank has also called for a closed-door meeting next week with bank chiefs to discuss measures for preventing frauds.

The RBI has instructed banks to adopt best practices as per the suggestion of the Dr N L Mitra committee in 31 August 2001 on the legal aspect of bank frauds. The committee said: "Every bank, financial institution and financial intermediary should be required to develop best practice code (BPC) within a time-frame and submit the same to the regulator."

The panel also pointed out the need for effective measures to internalise BPC among staff, effectively supervise the functionalisation of BPC, control and monitor variation from BPC, enforce BPC in the use of discretionary power and make documentation of the same, periodically review the use of discretionary power, conduct periodical legal system, audit and obtain compliance certification.