CVC for e-verification of bank guarantees to check frauds

To check fraudulent bank guarantees, the Central Vigilance Commission has suggested electronic verification of such documents directly with the concerned lending institutions.
The move will help curb the menace of banking frauds. A bank guarantee acts as a proof of financial stability and credit, ensuring that the liabilities of a debtor will be met.
The move comes in the wake of the anti-corruption watchdog receiving several references raising questions on the procedure being followed at present through paper-based verification.
It is observed that the practice of paper based verification of bank guarantees followed by the organisations is not only time consuming causing delay in acceptance and award of works or advance related payments but also its trustworthiness cannot always be ensured due to human intervention in it, the CVC said in its directive.

The organisations have been asked to follow a procedure of getting confirmation through digitally signed secured e-mails from issuing banks, it said.
The CVC has also suggested verification of bank guarantees through a website or via email. Organisations may evolve their own procedure adopting any one or more of these methods for ensuring genuineness of bank guarantees, which is compatible with the guidelines of Reserve Bank of India, it said in a communique issued to Chief Vigilance Officers, who acts as distant arm of the CVC, of all government departments.
The probity watchdog had earlier asked the apex body of Chartered Accountants Institute of Chartered Accountants of India (ICAI) to take steps to monitor genuineness of certificates issued by its members in order to check banking frauds.