New Delhi: Probity watchdog Central Vigilance Commission (CVC) has completed a first-of-its-kind analysis of the top 100 banking frauds, including those in the jewellery and aviation sectors, and shared its findings with the RBI, ED and CBI among others, Vigilance Commissioner T M Bhasin said Tuesday.
The analysis focussed on the modus operandi, the amount involved, type of lending (viz. consortium or individual), anomalies observed, loopholes that facilitated the perpetration of the fraud concerned and the systemic improvements required to plug the gaps in the system and procedures.
The frauds were classified and analysed for 13 sectors including gem and jewellery, manufacturing and industry, agro, media, aviation, service and project, discounting of cheques, trading, information technology, export business, fixed deposits, demand loan and letter of comfort.
The modus operandi of these top 100 loans has been thoroughly analysed, and various loopholes or lapses have been identified, Bhasin said.
"Based on the findings, various industry-specific suggestions for systemic improvement have been given in the final report, which has also been sent to the Department of Financial Services and RBI (Reserve Bank of India), to plug the loopholes observed by the Commission," he said.
Bhasin said the finding have also been shared the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI).
The measures suggested include strengthening of standard operating procedures (SOPs) and the monitoring system, and also highlighting the role of controlling offices, to examine the aspect of quality of business, Bhasin said.
The move assumes significance in the wake of high profile bank fraud cases involving absconding billionaire Nirav Modi and liquor baron Vijay Mallya among others.
The report, which has also been shared with the Ministry of Corporate Affairs, carries the analysis of large value frauds reported since March 31, 2017.
Bhasin said the commission initiated this analytical study as a preventive vigilance measure to minimise the occurrence of such type frauds in the future.
"The RBI has also confirmed to the commission that inputs given by the CVC are handy and shall be used for systemic improvements to mitigate the risks," he said, sharing the reason behind initiating the analysis of the frauds.
Giving details of the frauds in the gem and jewellery sector, the report cited different modus operandi by private companies, including inflating the valuation of diamonds with the malafide intention to avail higher credit facilities from the lenders.
It cited the absence of an effective mechanism in banks and certain other loopholes that led to frauds in this sector and suggested systemic changes. (With PTI inputs)