In the wake of an increase in reported incidents of frauds in the banking system, the Reserve Bank of India (RBI) has set up an expert panel to look into the reasons for high divergence in NPA classification and provisioning by banks.
According to a press release by the RBI, the committee will be headed by YH Malegam, who is the former member of the RBI central board of directors.
"(The panel has been formed) to look into the reasons for high divergence observed in asset classification and provisioning by banks vis-à-vis the RBI’s supervisory assessment, and the steps needed to prevent it; factors leading to an increasing incidence of frauds in banks and the measures (including IT interventions) needed to curb and prevent it; and the role and effectiveness of various types of audits conducted in banks in mitigating the incidence of such divergence and frauds," the statement said.
The members of the expert committee will be: RBI central board of directors member Bharat Doshi, former chairman and managing director of Canara Bank and former SEBI whole-time member S Rama, and Reserve Bank Information Technology Pvt Ltd (ReBIT) chief executive officer Nandkumar Saravade. RBI executive director AK Misra will be the member-secretary of the committee.
The RBI said it had alerted banks thrice on potential malicious use of SWIFT infrastructure since August 2016.
However, in view of the reported Punjab National Bank fraud, the RBI said it reiterated its confidential instructions on Tuesday and mandated the banks to implement, within the stipulated deadlines, the prescribed measures for strengthening the SWIFT operating environment in banks.
The SWIFT or the Society for Worldwide Interbank Financial Telecommunication is a network used by financial institutions to communicate financial transactions.
Published Date: Feb 20, 2018 21:09 PM | Updated Date: Feb 20, 2018 21:09 PM