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Shishir Sinha The Reserve Bank of India, on Tuesday, informed a Parliamentary Committee that banks have reported 15,673 incidents of frauds during the last three financial years (2015-16, 2016-17 and 2017-18), involving a total amount of ₹74,993 crore.
RBI Governor Urjit R Patel appeared before the Standing Committee on Finance, on Tuesday, to record evidence of the Governor on ‘Banking Sector in India: Issues, Challenges and the Way Forward, Including Non-Performing Assets/Stressed Assets in Banks/Financial Institutions’. The regulator was also asked whether the failure to detect irregularities in issuance of letters of undertaking (in the Nirav Modi scam) point to the failure of the supervisory function of the RBI. The RBI made it clear that it monitors banks on a continuous basis through ‘offsite reporting mechanism, coupled with need-based on-site inspection’.
The RBI also made it clear that the supervisory process does not constitute an audit of banks. “With the number of commercial bank branches being more than 1,18,000 in the country, it would be impossible to cover each and every branch under the RBI’s supervisory process. The RBI has no option but to rely on the internal control system of banks and supervisors can only do test checks,” the regulator said.
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