9911796707
TMI BlogLoss due to FraudsX X X X Extracts X X X X X X X X Extracts X X X X ..... Loss due to Frauds X X X X Extracts X X X X X X X X Extracts X X X X ..... stood at Rs. 3,505.50 crore. However, as per Reserve Bank of India's record the incidents of frauds reported by banks along with amount involved therein during 2011-12 was 5569 cases involving an amount of Rs. 4,448 crore. As reported by RBI, reasons for frauds are broadly as under:- 1. Use of loan not for the purpose/s for which it was sanctioned. 2. Improper pre-sanction inspection. 3. Lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of due diligence before sanction of loan. 4. Submission of fake title deeds, fake KYC documents by the borrowers. 5. Submission of fake and fabricated financial statement by the borrowers. 6. Sale of asset created out of loan without the knowledge of the bank. The measures initiated by RBI are as under:- Reserve Bank of India has issued detailed instructions vide Master Circular dated July ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01, 2012 on "Frauds-Classification and Reporting" containing all the details/aspects relating to frauds. On receipt of fraud reports from banks, various aspects related to the frauds are examined and concerned banks are advised to report the case to CBI/Police/SFIO, examine staff accountability, complete proceedings against the erring staff expeditiously, take steps to recover the amount involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this fraud, claim insurance wherever applicable and streamline the system and also procedures so that frauds do not recur. Reserve Bank of India as a part of its supervisory process also takes the following measures to prevent/reduce the incidence of frauds. i) Sensitizes banks from time to time about common fraud prone areas through issuance of modus operandi circulars on various types of fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auds and the measures to be taken by them. ii) Issues caution advises in respect of borrowers who have defaulted the banks. In the past considering various concerns arisen out of bank's operations, including incidence of frauds, RBI has advised banks to : a) Introduce a system of concurrent audit; b) Review working of internal inspection and audit machinery in banks by the Audit Committee of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board of Directors; c) Constitute a Special Committee of the Board to exclusively monitor frauds of Rs. One crore and above. (iii) In order to make third parties and professionals accountable, who have played a vital role in credit sanction/disbursement or facilitated the perpetration of frauds, banks have been advised vide circular dated March 16, 2009 to report to Indian Banks' Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (IBA). IBA in turn will prepare caution lists of such parties for circulation among the banks.
This was stated by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in the Rajya Sabha today.
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