Centre Sets Up Panel To Monitor Bank Frauds Before Investigation By CBI

In an attempt to ensure bank scam cases are examined by a committee before the Central Bureau of Investigation (CBI) intervenes or takes action, a five-member advisory board has been created by the Central Vigilance Commission (CVC) to examine financial frauds.

The board, headed by former vigilance commissioner TM Bhasin, will operate as a first-level of examination for all banking frauds above Rs 50 crore in state-run banks and financial institutions.

"This is being done to ensure that banks lend without any fear. Bankers have been apprehensive of coming under the glare of investigative agencies for even a bonafide decision going wrong," a senior government official told The Economic Times.

"All PSBs (public sector banks) shall refer all matters of suspected frauds involving sums of money in excess of Rs 50 crore in respect of public servants equivalent in rank to the general managers… to the board constituted under para 9 above advice before initiating enquiry or inquiry or investigation," an office order issued by the CVC on January 15 read.

"Now, in view of the increasing complexities and issues arising or difficulties being faced in technical matters, it has been decided to rename the board as an advisory board for banking and financial frauds," it said.

Bank credit grew at 7.1% last year to Rs 99.5 lakh crore, recording the second slowest in the last decade.

In December, Finance Minister Nirmala Sitharaman said that bank officers need not fear the three Cs, the Comptroller and Auditor General (CAG), the Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI). She assured them that no case would be given the CBI without banks signing off.

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