CBI nodal agency for banks to report high value frauds

The CBI has been made the nodal authority for banks to report high value frauds worth over Rs 50 crore in public sector banks.

The move comes after Reserve Bank of India (RBI) noticed that banks do not have a focal point for filing complaints with the CBI. As a result, the investigative agency has to deal with dispersed levels of authorities in banks.

"The CBI will act as centralised agency to receive complaints of frauds from banks," Central Vigilance Commissioner K V Chowdary told PTI.

A Joint Director level officer has now been authorised in the CBI to receive complaints of frauds of over Rs 50 crore from the banks. After receiving such reports, the officer can recommend investigation by any of the agency's wings (Anti Corruption, Economic Offences or Bank Security and Fraud Cell), official sources said today.

The officer-in-charge can then also recommend a probe by the Enforcement Directorate, they said.

The Chief Vigilance Officers, who act as distant arm of Central Vigilance Commission (CVC) to check corruption, of banks have been asked to act as nodal officers to coordinate in reporting such cases to the CBI, the sources said.

The CVC exercises superintendence over CBI for probing corruption cases.

A total of 171 bank fraud cases involving funds of over Rs 20,000 crore were probed by the CBI during 2015.

One of the high-profile bank fraud cases being probed by the CBI and ED is of liquor baron Vijay Mallya involving an amount of over Rs 9,000 crore.

As per norms, the complaints in cases of frauds in public

sector banks involving Rs three crore and upto Rs 25 crore are to be made with CBI's Anti Corruption Branch (where staff involvement is prima facie evident) or with the Economic Offences Wing of the agency in cases where staff involvement is prima facie not evident.

For amounts Rs 25 crore and less than Rs 50 crore, the complaint will be looked into by the CBI's Banking Security and Fraud Cell. The Joint Director (Policy) in the agency has now been mandated to receive complaints of frauds in the public sector banks involving over Rs 50 crore.

For private sector and foreign banks, complaints of fraud of amounts involving Rs one lakh and above need to be made to state police. If the amount is over Rs one crore, then the complaint has to be filed with Serious Fraud Investigation Office (SFIO) in addition to the state police concerned, as per the RBI guidelines.

The complaints in cases of frauds of Rs 10,000 and above, committed by staff of private and foreign banks, need to be made to state police, it said.

The officials concerned in the banks and their CVOs will have to ensure that the complaint lodged by the bank with the law enforcement agencies is drafted properly.

As per the central bank's norms, banks are required to lodge the complaint with the law enforcement agencies immediately on detection of fraud as delays may result in the loss of relevant 'relied upon' documents, non-availability of witnesses, absconding of borrowers and also the money trail getting cold in addition to asset stripping by the fraudulent borrower.