CVC publishes first report of the 100 biggest bank fraud with RBI, ED and CBI

CVC, bank fraud, RBI, ED, cbi, financial services department, Nirav Modi, Vijay Mallya The modus operandi of these top 100 loans has been thoroughly analyzed and various flaws or gaps have been identified, Bhasin said. (Reuters)

The Central Vigilance Commission (CVC) conducted an initial analysis of the 100 largest bank frauds, including those in the jewelery and aviation sectors, and shared its findings with the RBI. 39; ED and CBI, among others, Vigilance Commissioner TM Bhasin said Tuesday.

The analysis focused on the modus operandi, the amount involved, the type of loan (consortium or individual), the anomalies observed, the flaws facilitating the perpetration of the fraud concerned and the systemic improvements needed to fill the gaps in the system and procedures.

Fraud was classified and analyzed for 13 sectors: jewelery, jewelery, manufacturing and industry, agri-food, media, aviation, services and projects, check discount, trading, information technology, export, term deposits, demand loans and comfort letters.

The modus operandi of these top 100 loans has been thoroughly analyzed and various flaws or gaps have been identified, Bhasin said. "On the basis of the results, various industry-specific systemic improvement proposals were formulated in the final report, which were also sent to the Financial Services Department and the RBI (Reserve Bank of India), to fill the gaps identified by the Commission. Commission, "he told PTI. Bhasin said the findings had also been communicated to the Law Enforcement Branch and the Central Investigation Bureau.

Suggested measures include strengthening standard operating procedures and the monitoring system, as well as highlighting the role of the control offices, to examine the aspect of the quality of activities, Bhasin said. This decision is of particular importance in the wake of high-profile bank fraud cases involving runaway billionaire Nirav Modi and liquor baron Vijay Mallya, among others.

The report, which was also shared with the Ministry of General Affairs, contains an analysis of high-value frauds reported since March 31, 2017. Bhasin stated that this analytical study was initiated by the Commission as a preventive vigilance measure aiming to minimize the occurrence of such type frauds in the future.

"The RBI also confirmed to the Commission that the information provided by the CVC was very useful and needed to be used to make systemic improvements to mitigate risks," he said, explaining why he had initiated the analysis of fraud. Mr. Bhasin, former President and CEO of the Indian Bank, said the intention of the commission was to sensitize officials in the field by improving their knowledge of existing failures, so that similar frauds would not happen again. .

"These studies have been carried out by the Commission as a preventive vigilance tool, drawing on its vast experience in dealing with various cases of fraud and staff responsibility issues," he said. he declares. Bhasin stated as a conscious decision and in order to maintain discretion, the names of the accounts of the borrowers or entities, and the names of the banks were not disclosed in the report.

"However, steps are being taken for all encompassing actions such as investigation by major investigative agencies, determination of staff responsibility and recovery measures, etc. for effective action", did he declare. In giving details of fraud in the precious stones and jewelery sector, the report cites various private sector operating procedures, including inflating the value of diamonds with the malevolent intent of benefiting from higher credit facilities of the private sector. lenders. She cited the lack of effective mechanism in banks and some other shortcomings that led to frauds in this sector and suggested systemic changes.

"The credit facilities provided by the precious stones and jewelery sector to these companies have multiplied in a short time, in the effort of the banks to increase their credit exemption. There should have been sectoral limits on this type of credit risk, "the report suggests. The CVC in the report proposes different operating modes, gaps and systemic improvements.

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