Banking frauds: CVC, CBI, ED draw up plan for recovery

CVC told RBI to scan forex deals in single account with total value above $100,000

The Central Vigilance Commission (CVC), Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) will work jointly to recover money lost in the top 10 bank frauds in the country.

CVC has gone into the reasons behind those scams and tracked diversion of funds.  CVC, CBI and ED have prepared an action plan and would work to make recoveries and bring to book those involved, Central Vigilance Commissioner T M Bhasin told reporters after an interaction with students at NMIMS University.

The analysis involved thorough study of modus operandi, poring over the mistakes and shortcomings, plugging loopholes and making maximum recoveries in these cases. It, however, would be difficult to give a combined value of frauds, he added.

Referring to the alleged foreign exchange scam in Bank of Baroda (BoB), Bhasin said it was not only about Rs 6,000 crore but about advance remittance for imports.  BoB, CBI and ED are assessing how much of imports have actually happened and how much are yet to happen. If it found that some money has been diverted ED would work to bring back that amount, Bhasin said.

Earlier this week, the Reserve Bank of India said it might invoke provisions of bilateral agreements with regulators to get information from Hong Kong regulators to probe further in the alleged forex scam at BoB’s branch in New Delhi. RBI is also looking into how the controls are imposed and how is the oversight.

Bhasin said CVC has written to Reserve Bank of India on monitoring accounts where value of single transaction is below threshold of $100,000 but combined value of transactions in same day exceeds limit. RBI and Indian Banks' Association (IBA) is working on details for arrangement. This is a preventive step to detect patterns and nab those flouting rules for foreign exchange transactions.

He also said that CVC is extremely pro-active and within hours of any case being detected the agencies get involved and co-ordinate their actions.