RBI fiat on reporting attempted fraud cases

Our Bureau Updated - November 15, 2012 at 09:12 PM.

The Reserve Bank of India on Thursday said henceforth banks need not report attempted fraud cases of Rs 1 crore and above to the regulator’s Fraud Monitoring Cell.

However, banks should continue to place such cases before the audit committee of their own board.

The report containing attempted frauds should cover: the modus operandi of the attempted fraud; and how the attempt did not materialise in the fraud or how the attempt failed /was foiled.

Further, the report should elaborate on the measures taken by the bank to strengthen the existing systems and controls; and new systems and controls put in place in the area where the fraud was attempted.

In addition, yearly consolidated review of all attempted fraud cases detected during the year will need to be carried out by the audit committee of the board every year starting from the year ending March 31, 2013 within three months of the end of the relative year.

So far, cases of attempted fraud, where the likely loss would have been Rs 1 crore or more had the fraud taken place, were being reported by the banks to the RBI’s Fraud Monitoring Cell within two weeks of the banks coming to know that the attempt to defraud the bank had failed or was foiled.

Published on November 15, 2012 15:42