CVC: Bank fraud of over Rs 3 crore will require panel nod for CBI probe – Times of India

New Delhi: central vigilance commission ,CVC) has amended the rules to make it mandatory that all bank fraud cases involving more than Rs 3 crore will be referred to an expert panel, to decide whether to be investigated by the bank. central bureau ,CBI) is seen as a fresh attempt to give rest to the bankers. Earlier, only fraud cases of more than Rs 50 crore in public sector banks were referred to this panel.
Separately, bankers have approached Finance Ministry Demanding a “sunset period” for investigations so that they are not harassed by investigative agencies for genuine business decisions. He has suggested that agencies like CBI and CVC should be barred from investigating cases if a loan account remains the norm for seven or 10 years.

“There may be problems due to the current situation in the economy or a particular industry, or the product of a company may become obsolete over a period (of time). But there is no need to go on witch hunts if there is no problem for a specified number of years, some of which happens after retirement,” said a banker.
While the Department of Financial Services (DFS) is yet to act, it has agreed to change the rules in fraud cases with RBI and CVC. The move comes at a time when bankers have raised fresh concerns about redundancies by the three C-CVCs – the CVC, the CBI and the Comptroller and Auditor General of India – on several occasions. In the past, he has cited these concerns as the slow pace in approving loans, although the Prime Minister Narendra Modi and finance minister Nirmala Sitharaman Repeatedly offered full support on actual business decisions.
In a circular issued last week, the CVC said that based on discussions with the RBI and the finance ministry, Advisory Board for Banking and Financial Frauds (ABBFF) will probe the role of all officers and whole-time directors (serving and retired) in cases of Rs 3-50 crore classified as fraud by public sector banks and financial institutions on or after January 6. The January 6 deadline will be referred to the panel if they have reached the disciplinary authority or where criminal cases are yet to be filed.
While the CVC has said that a separate board would be set up for cases between Rs 3 crore and Rs 50 crore, bankers said there was a need to take a quick decision as the number of cases referred to ABBFF would now increase manifold .
In the past, banks have responded by classifying a large number of cases as frauds to ensure that the management does not face action later.