The government-backed move is aimed at preparing banks to provide timely information as well as prevent any frauds including timely fund diversion.
In a series of meetings held over the past two months between banks, the finance ministry and other investigative agencies, it was decided that lenders would receive intelligence and also provide quarterly feedback on inputs to the Central Economic Intelligence Bureau, or CEIBA senior bank executive said, aware of the developments.
“We will soon work out the benchmark loan amount for which CEIB report will be sought and guidelines to provide quarterly feedback,” the bank executive said.
The CEIB is responsible for gathering information for economic crimes and war, and for monitoring the economic and financial sectors.
Under the existing framework for large value fraud, the finance ministry has asked state-run lenders to take reports from the CEIB on any potential borrower, renewal of existing loans, or non-performing assets at the pre-approval stage . NPA) in the account of ₹ 50 crore and above.
Another banker, who did not wish to be named, said this would help banks conduct more systematic and comprehensive scrutiny of their loan portfolios in a time bound manner. This will help them to identify problems with the loan in time.
“CEIB is also looking at expediting the process for providing such information and digitizing the entire process,” he said, adding that the format for seeking information has been standardised.
Earlier this week, Finance Minister Nirmala Sitharaman said that the government’s sustained efforts to reduce non-performing assets (NPAs) and strengthen the health of public sector banks are now showing tangible results.
“All 12 PSBs declared net profit of ₹25,685 cr in Q2 FY23 and a total of ₹40,991 cr in H1 FY23, 50% and 31.6%, (yoy) respectively,” she tweeted.
He said that the country’s largest bank, state Bank of Indiareported a 74% increase in profit to ₹13,625 crore in the second quarter of this financial year.
data with reserve Bank of India Reflects the incidence of fraud in case of scheduled commercial banks as the percentage of gross advances declined from a peak of 1.05% in FY14 to 0.02% in FY22.
According to an RBI report, the number of frauds reported by private sector banks was mainly on account of small value card/internet frauds, while the amount of frauds reported by public sector banks was mainly in the loan portfolio. .