PNB scam: RBI sets up expert panel in wake of increasing fraud cases in Indian banking system

In the wake of the 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.

FP Staff February 20, 2018 21:09:11 IST
PNB scam: RBI sets up expert panel in wake of increasing fraud cases in Indian banking system

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.

PNB scam RBI sets up expert panel in wake of increasing fraud cases in Indian banking system

Representational image. Reuters

"(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.

Updated Date:

also read

Equity markets rebound in early trade after four-day slump
Business

Equity markets rebound in early trade after four-day slump

Markets may continue to wobble intra-day amidst escalating risks of a global recession driven largely by aggressive monetary tightening around the world to suppress elevated inflation

Sensex climbs 672 points as markets remain firm in early trade
India

Sensex climbs 672 points as markets remain firm in early trade

All the 30-share Sensex pack of firms were trading in the green in early trade, with IndusInd Bank, Bajaj Finserv, Bajaj Finance, Axis Bank, ICICI Bank, Larsen & Toubro and Tata Steel emerging as major winners

IRCTC scam: CBI court summons Bihar Dy CM Tejashwi Yadav
India

IRCTC scam: CBI court summons Bihar Dy CM Tejashwi Yadav

A Delhi court on Wednesday directed Bihar Deputy Chief Minister and RJD leader Tejashwi Yadav to personally appear before it on the CBI's plea seeking cancellation of his bail in the Indian Railway Catering and Tourism Corporation (IRCTC) scam