Aiming to prevent more frauds at public sector banks, the Finance Ministry has asked state-run lenders to take pre-emptive action and identify weaknesses within a 15-day period.
Rajeev Kumar, Financial Services Secretary, has also asked bank chiefs to examine all non-performing asset accounts of over ₹50 crore.
“PSB Managing Directors directed to detect bank frauds & consequential wilful default in time and refer cases to the Central Bureau of Investigation. To examine all NPA accounts over ₹50 crore for possible fraud,” he said in a tweet on Tuesday, adding that they can also involve the Enforcement Directorate and the Directorate for Revenue Intelligence to look into any violations under PMLA FEMA or Export Import norms.
“15 days deadline for PSBs to take pre-emptive action and identify gaps and weakness to gear up for rising operational and technological risks. To learn from best practices and pinpoint strategies, including tech solutions, clear accountability of senior functionaries,” added Kumar.
Each state-run lender will be expected to form a group of Executive Directors and Chief Technology Officer and will be the responsibility of the panel to “learn” from best practices across the banking sector and identify weakness in existing arrangements.
The norms will be implemented by lenders as part of the bank reforms package – EASE – which was included in the recapitalisation plan of ₹2.11-lakh crore.
The directive comes at a time when Punjab National Bank, the second-largest PSB, has detected ₹12,700 crore of fraud by the Nirav Modi Group and the Mehul Choksi Group.
Finance Minister Arun Jaitley has said that all efforts would be made to ensure that unethical businesses pay back dues to banks.