Addressing a conference of anti-corruption officials here, he said a strict regimen that instills financial discipline and deep-rooted sense of probity percolating down to the lowest rungs in the financial sector, especially banks and other financial institutions engaged in lending, is the need of the hour to detect the frauds.
"Probably, this may see a rise in the detection of frauds and bad debts, not to forget the NPAs, that have remained hitherto under the carpet, like the proverbial skeletons tumbling out of the cupboard," Sinha said.
Advocating strong action with surgical precision, he said, the imperatives require caution against both, the tendency to bury our heads in sands of time like ostriches and also the eagerness to cry wolf without seeing one.
"We need not be kind to the mercenaries, at the same time we must also be wary of unleashing terror in the market," Sinha said at the annual conference of Chief Vigilance Officers, who act as distant arm of the Central Vigilance Commission (CVC), of banks and financial institutions here.
The sixth conference on Friday was held in the backdrop of a rather serious scenario vis-a-vis bank frauds. The period from 2009-2014 saw a sharp increase in bad loans and advances leading to an alarming rise in NPAs across the banking sector, he said.
As per the RBI handbook of statistics on Indian economy, the NPAs have grown from around Rs 45,000 crore in 2009, to more than Rs 2.22 lakh crore in 2014. Even in percentage terms, the NPAs have grown from 2 per cent of gross advances in 2009 to more than 3.8 per cent of gross advances in 2014, the CBI chief said.
"If we add to the NPAs, the poorly performing restructured loan accounts and other sub-standard assets, the situation becomes even more grim," he said. Sinha said though the NPAs had grown in the last five years, there was under-reporting of frauds for a variety of reasons which is linked to the larger issue of corporate governance in banks. While acknowledging the impact of market dynamics of a globalised economy, we cannot also be oblivious to the deliberate undue accommodation in big ticket lending, he said.
Our probe into Vyapam will be fool-proof: Sinha
CBI will submit a report to the Supreme Court about its probe into the scam in the Madhya Pradesh Professional Examination Board (MPPEB), also known by its Hindi acronym Vyapam.
“We will investigate the cases within the manner that has been given to CBI by the Supreme Court. Our job is to investigate and submit our reports to the court and that we will do to the satisfaction of the court,” CBI Director Anil Sinha told reporters on the sidelines of annual conference of Chief Vigilance Officers of banks and financial institutions.
He said three more cases were registered on Friday and the agency was aware about the expectations and trust of the people as well as the Supreme Court.
CBI is “conscious of the expectation of the people and we are also equally conscious of the trust that the Supreme Court has put in us.