Most CBI fraud cases based on bank complaints

Nirmala’s meeting a good step in allaying the fears, say ex-agency officials

December 29, 2019 09:44 pm | Updated December 30, 2019 11:48 am IST - NEW DELHI

Union Finance Minister Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman

Amid apprehensions of “undue harassment” by the three Cs — the CBI, the Central Vigilance Commission and the Comptroller and Auditor General (CAG), figures show that most of the 90-odd bank fraud cases registered by the CBI this year were based on complaints from lenders.

In a major crackdown, when the CBI registered 42 cases and conducted searches at more than 190 locations across 16 States in the first week of November, action was taken on complaints received from various banks alleging fraud involving more than ₹7,000 crore.

Earlier this week, the CBI registered yet another case worth ₹110 crore against former Maruti Udyog Limited Managing Director Jagdish Khattar and Carnation Auto India, a company founded by him, following a complaint from the Punjab National Bank.

In his response, Mr. Khattar said the Carnation Auto India was “a bona fide business failure on account of many reasons, including cartelisation by auto majors by non-supply of genuine parts”.

As fears of undue harassment had been raised, CBI Director Rishi Kumar Shukla on Saturday attended a meeting chaired by Union Finance Minister Nirmala Sitharaman, with the chiefs of the public sector banks, the chief executive of the Indian Banks’ Association and the representatives of leading private banks.

The Minister said similar meetings would be held with the Enforcement Directorate, the Directorate of Revenue Intelligence and the Customs department to ensure that undue apprehensions did not hinder lending by banks.

The agency would be taking a series of steps in this direction, and would also set up a dedicated phone number for receiving complaints of any undue harassment.

Saying the government had taken a good step in allaying the fears, a retired senior CBI official said: “The CBI does have powers to take up cases suo motu on source information. While it, like other agencies, cannot indulge in fishing expeditions in the name of investigation, prudent credit lending decisions by banks are also essential to avoid any possibility of fraud.”

Another official pointed out that undue delay in reporting frauds had earlier become such a major hurdle that then CBI chief Anil Sinha raised it with the bankers at the 7th Conference of CBI and the Indian Banks’ Association in March 2016.

Mr. Sinha referred to the Vijay Mallya case to say the banks did not lodge complaints despite repeated requests. The agency had to register the case on its own. He also highlighted that the non-performing assets had gone up from ₹44,957 crore in 2009 to ₹3 lakh crore in 2015.

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