Mumbai: The Reserve Bank on Friday said banks could close select old cases of fraud involving up to Rs25 lakh, provided they had taken necessary actions at their end, even if the issue is still being probed by police or CBI or any other investigating agency.
This permission would only be for limited statistical/reporting purposes, RBI said in a notification.
Cases that are ongoing but in which challan and chargesheet have not been filed in the court for at least three years from the date of filing of First Information Report (FIR) by the CBI or police will be eligible for closure.
However, the central bank said banks should vigorously follow up with the investigating agencies to ensure that the probe process is taken to its logical conclusion even after the banks close the fraud cases.
Similarly, the banks should continue to ensure that they are regularly and appropriately represented in the court proceedings as and when required. All the relevant records pertaining to such cases must be preserved till the cases are finally disposed of by CBI / Police or Courts, as the case may be, it added.
The central bank further said that the process of examination of staff accountability should be completed within the prescribed time frame.
RBI said that the banks have been requesting it to allow them to close some old cases in which investigation by CBI/Police or court cases were pending for several years. This has been resulting in accumulation of large number of outstanding fraud cases in the records of banks, projecting an adverse picture about the banks before the stakeholders /public, thereby exposing them not only to reputational risk but also lower rating by international agencies, RBI said.