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The government has watered down its framework for dealing with high-value frauds in a bid to encourage managing directors (MDs) and chief executive officers (CEOs) of state-owned banks to take commercial decisions fearlessly.
Instead of MDs and CEOs, the boards of public sector banks (PSBs) will now be held accountable for the various regulator-prescribed timelines for reporting or investigating frauds above Rs 50 crore, according to a directive sent by the finance ministry to banks.
The finance ministry had in May 2015 created the framework on “timely detection, reporting, and investigation” relating to large-value bank frauds. “The overall responsibility” for ensuring compliance
