After PNB fraud govt wants PSBs to probe NPAs above Rs50 crore, report fraud to CBI
New Delhi: Finance Ministry on Tuesday directed public sector banks (PSBs) to probe all non-performing assets (NPA) accounts of over Rs50 crore for possible fraud and accordingly report the cases to Central Bureau of Investigation (CBI).
The direction comes amid state-owned lender Punjab National Bank (PNB) reporting Rs12,700 crore fraud through alleged fraudulent misuse of letters of undertaking (LoUs) by billionaire jeweller Nirav Modi and associates.
Besides, other PSBs too have approached investigating agencies as borrowers (as in the case of Rotomac Group and Simbhaoli Sugars) have not returned loans. Financial services secretary Rajiv Kumar, through a tweet informed that managing directors of PSBs have been directed to detect bank frauds and refer cases to the CBI.
“PSB MDs directed to detect bank frauds & consequential wilful default in time & refer cases to CBI. To examine all NPA accounts > Rs 50Cr for possible fraud,” the secretary said in the tweet. PSBs have also been asked to involve Enforcement Directorate (ED)/ Directorate of Revenue Intelligence (DRI) for violations of Prevention of Money Laundering Act(PMLA), FEMA or export import norms.
State-owned banks, with combined gross non-performing assets (NPAs) of about Rs8.5 trillion, have been asked by the ministry to go in for prompt fraud identification and take action within prescribed deadlines.
Kumar further said the chief vigilance officer of the bank concerned will have to vet complaint and coordinate with CBI for frauds exceeding Rs50 crore. Also, banks will have to seek borrower status report from Central Economic Intelligence Bureau (CEIB) on the account turning NPA and CEIB will have to revert in a week.
Banks have to involve ED/DRI “if conditions warrant,” under the framework for timely detection, reporting, and investigation of large value bank frauds.