REPORTING OF FRAUDS IN BANKS- CVC DIRECTIVES

Date: 19-06-2017

To,

1. Central Vigilance Commission, New Delhi

cenvigil@nic.in

2. Reserve Bank of India, Dept of Banking Supervision, Central Office, Mumbai

[ on https://www.rbi.org.in/Scripts/helpdesk.aspx]

Dear Sirs,

Subject: Frauds in Public Sector Banks above Rs.10000 and Below Rs.100000/-

Vide circular No. 06/06/17 dated 14-06-2017, CVC has advised public sector banks not to report above frauds to State Police if staff is not involved, in view of practical difficulties faced by PSBs. This has been decided by CVC in consultation with RBI. Only internal enquiry is to be conducted by Banks.

Such a decision will encourage and facilitate online fraudsters to defraud small depositors in banks committing each fraud below Rs.100000/- and get immunity from police action, except if the account holder files complaint or FIR with State Police. Such a complaint by common man is not taken seriously by Police [practical difficulty of common man], However, if complaint or FIR is filed by Central Govt entity, usually it is taken little seriously. With digital India initiative of Govt, such cyber frauds will increase many folds in near future and common account holder will be looted without any help. I am attaching two news paper cuttings as examples. RBI is yet to come out with policy and operative guidelines for zero liability of victim of fraud. Common man cannot be made to lose his hard earned money for convenience of Banks.

Only police has powers to question transferee banks/wallets of defrauded amount. Similarly only police can get information of mobile SIM, which is used to get OTP/CVV/password and details of debit card. PSB has no such power to get the information of accounts or stop further transfer of defrauded amount. Only police can stop further transfer or withdrawal from transferee bank/wallet. In absence of this information fraudsters cannot be located. Hence name, address etc of fraudster will never come to light and common citizen will not get back amount.

This decision is not in the interest of common account holders and I request CVC and RBI to review the same. I shall be shortly seeking from CVC and RBI information, which lead to such anti-citizen decision, under RTI Act

Copy to: Dept of Fiancial Services, Ministry of Finance, GoI, New Delhi