News

Advisory Board for Banking Frauds (ABBF)

Related Topics: Banking Frauds, Central Vigilance Commission (CVC)

Why in News

CVC has constituted an Advisory Board for Banking Frauds (ABBF) headed by former Vigilance Commissioner T.M. Bhasin to examine bank fraud of over ₹50 crore and recommend action.

Earlier Body

  • The panel in its previous avatar was called the Advisory Board on Bank, Commercial and Financial Frauds.

Tenure

  • The tenure of the Chairman and members would be for a period of two years from August 21, 2019.

Other Members

  • Madhusudan Prasad (former Urban Development Secretary)
  • D K Pathak (former Director General of Border Security Force)
  • Suresh N Patel (former MD and CEO of Andhra Bank)

 

Functions & Jurisdiction

  • The ABBF, formed in consultation with the RBI, would function as the first level of examination of all large fraud cases before recommendations or references are made to the investigative agencies by the respective public sector banks (PSBs).
  • The four-member board’s jurisdiction would be confined to those cases involving the level of officers of General Manager and above in the PSB in respect of an allegation of a fraud in a borrowal account.
  • Lenders would refer all large fraud cases above ₹50 crore to the board and on receipt of its recommendation or advice, the bank concerned would take further action in such matter.
  • CBI may also refer any case or matter to the board where it has any issue or difficulty or in technical matters with the PSB concerned.
  • The Board would also periodically carry out frauds analysis in the financial system and give inputs for policy formulation related to the fraud to the RBI.

Supporting Agency

Reserve Bank of India will provide required secretarial services, logistic and analytical support along with the necessary funding to the board.

Background

  • Government has already issued the ‘framework for timely detection, reporting, and investigation relating to large-value bank frauds’ to PSBs, which makes it clear that all accounts exceeding ₹50 crore, if classified as an NPA, should be examined by banks from the angle of possible fraud.
  • A report should be placed before the bank’s Committee for Review of NPAs based on the findings of the investigation.
  • Besides, the PSBs have been advised to obtain a certified copy of the passport of promoters/directors and other authorised signatories of companies taking loan facilities of more than ₹50 crore.

 

[Source: The Hindu]

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