DFS, CBI Meeting with SBI, PNB and Other PSU Banks to streamline Fraud Investigations in Banks
The Department of Financial Services (DFS) held a ‘Coordination Meeting on Vigilance Matters of Public Sector Banks (PSBs)’ in New Delhi on December 4, 2024. The primary aim was to enhance inter-departmental coordination and expedite investigations into bank fraud-related cases.
Key Participants
- Shri M. Nagaraju, Secretary, DFS
- Shri Praveen Sood, Director, CBI
- Chairman, Advisory Board for Banking and Financial Frauds (ABBFF)
- Chairman, State Bank of India (SBI)
- MDs and CEOs of PSBs
- Chief Vigilance Officers of PSBs
Representatives from the Ministry of Home Affairs (MHA), Department of Personnel and Training (DoPT), Reserve Bank of India (RBI), and the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) also participated.
Discussions and Outcomes
The meeting highlighted the government’s measures to tackle banking fraud, including the Insolvency and Bankruptcy Code (IBC) and the establishment of the National Asset Reconstruction Company (NARCL), which have improved the asset quality and performance of PSBs.
Key areas of focus included:
- Expediting Fraud Investigations: A framework for regular interaction between bankers and the CBI was proposed to streamline investigations and deter future frauds.
- Collaboration Enhancements: Detailed presentations from DFS and CBI outlined progress in fraud investigations and addressed operational challenges.
- Protection of Bonafide Decisions: Amendments to the Prevention of Corruption Act, 1988, were discussed, emphasizing the protection of honest banking decisions from undue prosecution.
- Operational Efficiencies: Discussions addressed complaint filing, investigation reviews, and support mechanisms for CBI during the investigation process.
Technological Advancements
The PSB Alliance presented an ‘asset tracing’ IT application designed to provide detailed information on assets pledged as security for loans. PSBs were encouraged to evaluate the application’s potential benefits individually.
Conclusion
The meeting concluded with a commitment to collaborative efforts in preventing fraud, ensuring swift prosecution of offenders, and further improving the financial system’s resilience. Regular discussions between bankers and investigative agencies are expected to foster operational efficiency and deter fraudulent activities.
