Enquiries Initiated against Bank Officials | Implementation of Structural Reforms

Enquiries Initiated against Bank Officials | Implementation of Structural Reforms

ANSWERED ON: 14.12.2018

Enquiries Initiated against Bank Officials

Will the Minister of FINANCE be pleased to state:-

(a) the number of investigative agencies led enquiries against bank officials who used managerial discretion without due diligence in issuing loans;

(b) number of bank frauds noted since 2014 along with the number of enquiries launched and action taken, against auditors who failed to bring fraudulent transactions to notice;

(c) whether the Government intend to make Quality Review Board of Institute of Chartered Accountants of India (ICAI) independent authority, instead maintaining it as a department under ICAI due to inherent conflict of interest, if so, the details thereof and the steps taken and deadline set, in achieving this goal;

(d) the details of structural reforms initiated in banks to ensure Non Performing Assets do not pile up again after recapitalisation; and

(e) the direct effect of recapitalisation of banks on fiscal deficit of country and the steps taken to counter resulting fiscal deficit?


(a) Central Bureau of Investigation has intimated that a total of 273 (268 Regular Cases and 05 Preliminary Enquiry cases) have been registered by CBI relating to corruption in banks during the year 2017 and 2018 (upto 30.06.2018).

(b) Data provided by Reserve Bank of India (RBI) in respect of number of fraud cases (Amount involved in individual cases Rs 1 lakh and above) and action taken on the bank officials involved during the period 2015-2017 is at Annexure.For enforcement of auditing standards and ensuring the quality of audits, Government has initiated establishment of National Financial Reporting Authority as an independent regulator.

(c)Ministry of Corporate Affairs has informed that there is no proposal under their consideration at present

(d)A number of steps have been taken to comprehensively address Non Performing Assets (NPAs) in banks. Reforms have been initiated in Public Sector Banks under the PSB Reforms Agenda announced by the Government in January 2017. These will help avoid recurrence of a situation of high NPAs and enable resolution / recovery in respect of NPA accounts.

PSBs are committed to implement the following reforms in this direction —

(a) number of lenders in consortium restricted by requiring minimum of 10%, for better managed consortium lending,

(b) ring-fencing of cash flows for prudent lending,

(c) monitoring of loans above Rs. 250 crore through specialized agencies for effective vigilance

(d) use of technology and analytics for comprehensive due-diligence across data sources,

(e) comprehensive checking of all accounts of Rs. 50 crore and above that turn NPA for wilful default and fraud,

(f) strict enforcement of conditions of loan sanction,

(g) establishment of stressed asset management verticals in banks for focused recovery and timely and effective management of stressed accounts, and

(h) Collection of passport details of borrowers for loan abov
e Rs. 50 crore
(e) The servicing of the securities issued for capital infusion in public sector banks (PSBs) impacts the fiscal deficit in the year of issue and subsequently. This also further enhances the debt of the Government to the extent of the nominal value of securities.


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