MINISTER OF STATE IN THE MINISTRY OF FINANCE SHRI S.S. PALANIMANICKAM
(a)&(b) : Central Vigilance Commission (CVC) has reported that it has not made any
categorization of corruption in various organizations. The report of Rashtriya Sahara
is based on the annual report 2004 of the CVC wherein it is mentioned that major
penalty has been imposed on 2510 employees (all categories) of banks during 2004.
(c), (d), (e) & (f) : Number of employees of banks under CVC`s jurisdiction, on which
punishment has been imposed after detailed investigation and following prescribed
procedure, during last three years, is as follows :
2002 - 1404
2003 - 2617
2004 - 2358
(g) The bank-wise details of frauds and amounts involved therein as reported by Public
Sector Banks to RBI, during the years 2002, 2003, 2004 and 2005 (upto June) are in the
Annexure. RBI has reported that their Fraud Monitoring Ceii compiles bank-wise
information.
(h) Reserve Bank of India as a part of its supervisory responsibility has been advising
banks from time to time about the common fraud prone areas and the msasures to be
taken by them to prevent/reduce the incidence of frauds/ corruption in banks. To
strengthen machinery in banks to prevent/reduce the incidence of frauds, RBI has,
inter-alia, advised the banks to :-
Introduce a system of concurrent audit covering branches accounting for 50
percent of business (deposits plus advances).
Constitute Audit Committee of the Board of Directors, with a view to ensuring
that the working of internal inspection and audit: machinery is monitored at the
top most level in banks.
In order to give a focused attention by the Board on fraud prevention, to
constitute a Special Committee of the Board for exclusive monitoring of large
value frauds of Rs. 1 crore and`above.
review and refine the systems and procedures with regard to balancing of books,
reconciliation of inter-branch accounts, review of the adequacy of the internal
inspection/audit machinery am; control returns, visit to branches by officials of
the controlling offices and to ensure that the warning signals do not go unnoticed.
Ensure more intensive screening of candidates at the time of recruitment.
Ensure clear demarcation of duties and responsibilities of employees and
periodical rotation of staff within the branch and from one branch to another.
Initiate disciplinary action promptly and award exemplary and deterrent
punishment to the delinquent employees.
Strictly comply with the recommendations of Mitra Committee on legal aspects
of bank frauds.
