July 23, 2019
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Bank fraud prevention measures strengthen detection, due diligence and enforcement for large NPAs, with legal and institutional reforms.
The Government has established a framework requiring banks to examine large-value NPAs for possible fraud, report findings to NPA review committees, initiate wilful-default examination upon reporting to the central bank, and seek intelligence inputs. PSBs must enhance due diligence for large loans by obtaining certified passport copies of promoters/directors, consider publishing photographs of wilful defaulters per Board policy, rotate officials and request travel-restriction measures. Reforms include the Fugitive Economic Offenders Act, a Central Fraud Registry, the National Financial Reporting Authority and technical connectivity between core banking and messaging systems; central bank data shows detected frauds by institution.