In a significant development, the finance ministry has asked all public sector banks (PSBs) to examine their Non-Performing Asset (NPA) accounts above Rs 50 crore for possible fraud.
In a directive to Managing Directors (MDs) of all public-sector banks, the finance ministry has asked them to detect bank frauds and consequential wilful default in time and refer such cases to the Central Bureau of Investigation (CBI).
Giving details of the finance ministry’s directive, Department of Financial Services Secretary Rajeev kumar tweeted that the PSBs have been asked to include Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI) in cases involving PMLA/FEMA/EXIM violations.
Rajeev Kumar further said that the ministry has set a 15-day deadline for PSBs to take pre-emptive action and identify gaps, weaknesses to gear up for rising operational and technological risks.
PSB MDs directed to detect bank frauds & consequential wilful default in time & refer cases to CBI. To examine all NPA accounts > Rs. 50Cr for possible fraud. Involve ED/DRI for PMLA/FEMA/EXIM violations if any. #EASE #NewIndia @FinMinIndia @PMOIndia @PIB_India pic.twitter.com/ZURiWu4D5T— Rajeev kumar (@rajeevkumr) February 27, 2018
15 day deadline for PSBs to take pre-emptive action & identify gaps/Weaknesses to gear up for rising Ops & Tech risks; To learn from best practices & pinpoint strategies including tech solutions; Clear accountability of senior functionaries.#EASE @PMOIndia @FinMinIndia @PIB_India pic.twitter.com/tankAMtBem— Rajeev kumar (@rajeevkumr) February 27, 2018
State-owned banks, with combined gross non-performing assets (NPAs) of about Rs 8.5 lakh crore, have been asked by the ministry to go in for prompt fraud identification and take action within prescribed deadlines.
Kumar further said the chief vigilance officer of the bank concerned will have to vet complaint and coordinate with CBI for frauds exceeding Rs 50 crore.
Also, banks will have to seek borrower status report from Central Economic Intelligence Bureau (CEIB) on the account turning NPA and CEIB will have to revert in a week.
Banks have to involve ED/DRI "if conditions warrant," under the framework for timely detection, reporting, and investigation of large value bank frauds.
The finance ministry’s missive comes days after Punjab National Bank (PNB), India’s second largest-lender, was hit by a massive Rs 12,700 crore fraud involving billionaire jeweller Nirav Modi.