CVC shares analysis of top 100 bank frauds with RBI, ED and CBI
16 October 2018
The Central Vigilance Commission (CVC) has undertaken a comprehensive analysis of top100 banking frauds in the country, including the recent high-profile, frauds involving top jeweller Nirav Modi and liquor barn Vijay Mallya.
The probity watchdog said the findings of the first-of-its-kind analysis of the top 100 banking frauds, including those in the jewellery and aviation sectors, have been shared with the RBI, ED and CBI among others, Vigilance Commissioner T M Bhasin said Tuesday.
The analysis focused on the modus operandi, amount involved, type of lending (viz, consortium or individual), anomalies observed, loopholes that facilitated perpetration of the fraud concerned and the systemic improvements required to plug the gaps in the system and procedures.
The frauds were classified and analysed for 13 sectors including gem and jewellery, manufacturing and industry, agro, media, aviation, service and project, discounting of cheques, trading, information technology, export business, fixed deposits, demand loan and letter of comfort.
The modus operandi of these top 100 loans has been thoroughly analysed and various loopholes or lapses have been identified, Bhasin said.
“Based on the findings, various industry specific suggestions for systemic improvement have been given in the final report, which have also been sent to the Department of Financial Services and RBI (Reserve Bank of India), in order to plug the loopholes observed by the Commission,” Bhasin was quoted as saying.
Bhasin, however, said as a conscious decision and with a view to maintaining discreteness, the names of borrower accounts/entities and the names of the banks have not been disclosed in the report. However, steps are being taken for all encompassing actions such as investigation by the premier investigative agencies, fixing staff accountability and recovery measures, etc for effective action.
Bhasin said the modus operandi of these loans has been thoroughly analysed and various loopholes/lapses have been identified. Based on the findings, various industry specific suggestions for systemic improvement have been given in the final report, which have also been sent to Dept of Financial Services (DFS) and RBI, in order to plug the loopholes observed by the commission.
The measures suggested include strengthening of SOPs, monitoring system and also highlighting the role of controlling offices, so as examine the aspect of quality of business.
Bhasin said the analytical study was initiated by the Commission as a preventive vigilance measure so as to minimise the occurrence of such type frauds in future. RBI has also confirmed to the Commission that inputs given by CVC are very useful and shall be used for systemic improvements to mitigate the risks.