Question : Fraud and Bungling in Banks and Financial Institutions

(a) whether the officials/employees of various Public Sector Banks(PSBs) and financial institutions have been charged for financial frauds and bungling and if so, the details thereof, bank/financial institution/State/UT-wise;

(b) the total number of accused officials/employees along with the status of inquiry initiated against them during the period of March, 2015 to March 2018, bank, State/UT-wise;

(c) whether these officials have been suspended from the services for the said charges and if so, the total number of such officials;

(d) whether the Government/Reserve Bank of India has any mechanism for monitoring of financial frauds in these banks and financial institutions and if so, the details of the nodal agency and officers appointed for this purpose across the country, State/UT-wise; and

(e) if not, the reasons therefor and the manner in which whistleblower may approach these authorities without the fear of disclosure of their names?

MINISTER OF STATE IN THE MINISTRY OF FINANCE


(a) to (c): The number of fraud cases provided by Reserve Bank of India, where officials/employees are involved, bank/financial institution-wise and State/UT-wise, are given in Annex 1 and Annex 2 respectively.

Whenever any irregularities are found or observed on the part of officials/employees, the concerned organisations initiate action as per their extant regulations and Central Vigilance Commission (CVC) guidelines. Commensurate punishment is awarded to the delinquent employees based on the seriousness of the wrongdoings in terms of their disciplinary regulations and with the advice of CVC/ Chief Vigilance Officer(CVO).

(d) & (e): RBI has implemented a fraud reporting and monitoring mechanism for banks and select financial institutions through a Master Direction in terms of which banks are required to report fraud cases to RBI, through an online platform. Further, Central Fraud Registry, a web based searchable database of frauds reported by the banks, containing data for the last 13 years has been made operational by RBI since January, 2016.

Department of Personnel and Training’s Resolution No. 89 dated 21st April, 2004, commonly known as Public Interest Disclosure and Protection of Informers Resolution (PIDPI), 2004, envisages a mechanism by which a complainant can blow a whistle by lodging a complaint and also seek protection against his victimization for doing so. The CVC is the designated agency to receive complaints from whistle blowers under the PIDPI Resolution.

Further amendments, inter-alia, authorised the Chief Vigilance Officer of the Ministries or Departments of Government of India to act as the designated Authority to receive written complaint or disclosure on any allegation of corruption or misuse of office.
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