The meeting also saw participation by DFS Secretary, CBI Director; ABBFF Chairman; SBI Chairman; MDs & CEOs of PSBs, Chief Vigilance Officers of PSBs, with representations from DFS, MHA, DoPT, Reserve bank of India (RBI), and MD, CERSAI

As a way forward, platforms will be created for regular discussion between bankers and CBI to expedite investigation in bank fraud cases

The Department of Financial Services (DFS) organised a ‘Coordination Meeting on Vigilance Matters of Public Sector Banks (PSBs)’ to enhance inter-departmental cooperation among different Departments, Central Bureau of Investigation (CBI) and PSBs for expediting investigation in bank fraud-related cases, in New Delhi.

The meeting attended by Shri M. Nagaraju, Secretary, DFS; Shri Praveen Sood, Director, CBI; Chairman, Advisory Board for Banking and Financial Frauds (ABBFF), Chairman, SBI;  MDs & CEOs of PSBs, Chief Vigilance Officers of PSBs, with representations from DFS, MHA, DoPT, Reserve bank of India (RBI), and MD, Central Registry Of Securitization Asset Reconstruction And Security Interest Of India (CERSAI).

It was discussed that bank related fraud cases are a major area of concern, and the Government has taken various measures such as Insolvency and Bankruptcy code (IBC) and creation of National asset reconstruction company (NARCL) for resolution of stress in banking assets —leading to an improvement in asset quality and performance of PSBs. 

The meeting focused on expeditious and effective investigation in bank fraud cases that will have salutary deterrent effect and is likely to further catalyse resolution of stressed banking assets; and all measures were discussed for expeditious investigation in bank fraud cases.

For facilitating this, various areas of cooperation between CBI and PSBs were discussed, with detailed presentations made by DFS and CBI to highlight the progress made in investigation of bank fraud cases and other operational issues.  

It was noted during the meeting that amendments made to Prevention of Corruption Act, 1988, to prevent investigation and prosecution of bankers for bonafide decisions has had a positive impact. Requests made by CBI are examined by bankers and honest decisions remain protected. It was also agreed that platforms will be created for regular discussion between bankers and CBI.

Other operational issues related to filing of complaints with CBI in bank fraud cases, regular review of investigation and support required by CBI during investigation process was also discussed. It was observed that regular discussion between bankers and CBI will bring in operational efficiencies in the investigation of bank fraud cases.

PSB Alliance — a company set up by PSBs to jointly offer important customer-oriented services — made a presentation about ‘asset tracing’ IT application. The application will provide detailed information to PSBs about the assets taken as security for extending a credit facility. Various features of IT application were discussed during the course of meeting. It was decided that all PSBs will independently evaluate the requirement of such an application for their organisation.

The meeting concluded with an acknowledgment of the collective efforts by all stakeholders to prevent fraud and to prosecute the guilty in a timely manner.

Inter-agency coordination on bank fraud investigations to expedite probes and institutionalize regular banker-CBI consultations. Meeting by the Department of Financial Services aimed to strengthen inter-agency cooperation between PSBs and the CBI to expedite bank fraud investigations by creating regular banker-CBI consultation platforms, streamlining complaint filing and review processes, and clarifying operational support needs. The meeting noted positive effects of Prevention of Corruption Act amendments protecting bonafide banking decisions, reviewed insolvency and asset recovery mechanisms, and introduced an asset tracing IT application for PSB evaluation.