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Sharp decline in PSB fraud amount
Why is it in the news?
- According to the Finance Ministry, Comprehensive steps taken to curb fraud in public sector banks (PSBs) have resulted in a sharp decline in the amount involved.
- There is a decline from ₹50,329 crore in 2013-14 to just ₹3,781 crore in the first three quarters of 2019-20.
More in the news
- An online searchable database of frauds reported by banks:
(1) It has set up in the form of Central Fraud Registry to enable timely identification, control and mitigation of fraud risk and for carrying out due diligence during the credit sanction process.
- The Fugitive Economic Offenders Act is being invoked to attach and confiscate the assets of violators and strip them of the entitlement to defend any civil claim.
- Directives to Banks:
(1) The PSBs have been told to get certified copies of passports of promoters and directors and other authorised signatories of companies availing themselves of loan facilities of more than ₹50 crore.
(2) PSBs have been advised to decide on publishing photographs of wilful defaulters as per procedure.
(3) The government has also asked these banks to strictly ensure rotational transfer of officials to mitigate the possibility of their involvement in any fraud.
(4) The bank heads have been empowered to issue requests for opening look-out circulars against suspects.
Source
The Hindu.