Finance Secretary Hasmukh Adhia calls meeting amid high-profile bank frauds

In the wake of an increase in bank frauds, the Centre has nudged law enforcement agencies to scrutinise the red flag raised on financial transactions and detect irregularities.

According to sources, central probe agencies are failing to adhere to the information-sharing protocol formulated by the finance ministry.

To address this issue, Finance Secretary Hasmukh Adhia on Tuesday called an urgent meeting of the Central Economic Intelligence Bureau (CEIB). The aim of this meeting was to put out measures to  arrest the lack of coordination among probe agencies.

The CEIB is the nodal agency under the Ministry of Finance for coordinating financial and economic data. It is responsible for ensuring effective interaction across probe agencies engaged in dealing with economic offences. The CEIB comprises members of regional economic intelligence bureaus and other bodies such as the Central Bureau of Investigation (CBI), Enforcement Directorate, Central Board of Direct Taxes, and Reserve Bank of India (RBI).

“A high-level meeting was called due to the recent spate of banks frauds wherein it was felt that better coordination and information sharing between the agencies would have prevented such scams,” said an official.

According to him, the officials attending the meeting were briefed on improving information flow.

Sources said the finance ministry was upset with the probe agencies’ approach and handling of tip-offs. "The ministry asked them to make it mandatory to share findings and evidence in all major investigations being done by each agency," another official said.

The official said in the Punjab National Bank case, the central bank claimed it had alerted banks thrice on potential malicious use of  the SWIFT (Society for Worldwide Interbank Financial Telecommunication) infrastructure since August 2016. But the banks did not communicate the issue to other agencies. 

Similarly, the income tax Department conducted a search on Nirav Modi and Mehul Choksi— the two prime accused in the case in January 2017, but did not share details with other agencies.

The CBI registered a preliminary enquiry after it received complaints from a whistle-blower that Videocon, which had borrowed funds from ICICI Bank, invested in NuPower Renewables, a firm owned by ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar’s husband. The other agencies took action after the CBI began the probe in the alleged quid pro quo deal among Videocon, ICICI Bank, and NuPower Renewables.