CBI organizes 5th Annual Conference of Chief Vigilance Officers of Banks and Financial Institutions

New Delhi/Jalandhar, August 21, 2013: Dr C Rangarajan, Chairman Economic Advisory Council to the PM says discretionary powers in the financial sector must be exercised only within prescribed limits; lauds CBI’s role in probing bank and financial frauds and maintaining stability of the Indian Economy 

Director CBI Ranjit Sinha says the amount of money involved in Bank frauds has seen a huge jump in recent years; asks Vigilance Officers of Banks to play a pro-active role in checking losses to Government exchequer and public money.

The Central  Bureau of Investigation in its Golden Jubilee year, organized the 5th Annual Conference of CBI Officers & Chief Vigilance Officers of Public Sector Banks and Financial Institutions at CBI Headquarters at New Delhi today. The theme of the daylong Conference was “The Role of Vigilance in Timely Detection of Bank Frauds”. Dr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister delivered the key note speech at the Conference. Director CBI Shri Ranjit Sinha also addressed the Inaugural session.

In his  Key note address to senior CBI officers and Chief Vigilance Officers of Banks and Financial Institutions, Dr. C.Rangarajan, said that CBI has an important responsibility and role to play in maintaining stability of the Indian economy.  He said that safety and soundness are two attributes in the smooth functioning of financial institutions, and the CBI in consultation with Vigilance Officers of Banks and Financial Institutions can help in prescribing an appropriate vigilance procedure for the financial sector and public sector banks. Dr. Rangarajan said that for a well regulated financial system, it is imperative that discretionary powers must be exercised only within prescribed limits.

Rangarajan stated that both preventive vigilance and punitive vigilance are very important factors in maintaining discipline in the banking and financial sector, and added that those who violate procedures and rules must be appropriately punished.  Dr. Rangarajan emphasized that no person should be allowed to override the prescribed caution that is essential in banking and financial transactions. He said there is no scope at all for actions or decisions which are motivated by personal considerations. Dr. Rangarajan said that the task laid out for CBI and Vigilance Officers is a delicate one as a certain amount of risk taking is inherent in the banking and financial sector.

In his welcome address, Director CBI Ranjit Sinha said that the amount of money involved in bank frauds has increased substantially over the years. Quoting RBI analyses of the year 2009-10, Sinha said that while the number of bank frauds cases has shown a decline of 46.37%, the amount of money involved has quadrupled  showing an enormous increase of 324.27%.

The Director CBI said that the high amount of Non-performing Assets (NPAs) of Public Sector Banks is cause for concern, and added that CBI has already initiated enquiries in some of the big defaulters accounts. Sinha asked Vigilance Officers of Public Sector Banks to play a proactive role in checking losses to the government exchequer and public money. Director CBI pointed out that at times, there appears to be reluctance on the part of banks to declare bad accounts as frauds despite there being clear cut manifestations. He said there is need to realize that the delay in reporting of a fraud will adversely affect the tracking and recovery of proceeds of crime as the initiative is lost due to delay.

Sinha also said that there are often differences of opinion between CBI and banks regarding role of public servants, and opined that there should be no reason for denial of sanction for prosecution wherever malafide acts by delinquent officials caused huge losses to the bank. He said that  that the fight against  financial frauds is a joint and coordinated effort of CBI, State Police, concerned agencies and Banks, for which all have to work as a team to achieve the common objective.

Rajiv Takru, Secretary, Department of Financial Services will address the Valedictory Session this evening.

The topics under discussion in this Conference include, Corporate Governance; Emerging Trends in Bank Frauds and Prosecution Sanction. The Conference was addressed by officers and financial experts from the RBI, Public Sector Banks, Vigilance Commissioner and officers of the Ministry of Finance. Sessions were moderated by   the Special Directors and Additional Director of the CBI.

The conference was  attended by senior officers of CBI’s Bank Securities & Fraud Cell, Economic Offences & Anti Corruption Divisions as well as Heads of Economic Offences Wing of State Police Units based in metropolitan cities.  The Public Sector Banks which participated in the Conference include State Bank of India; Corporation Bank; Indian Bank; Punjab & National Bank, Oriental Bank of Commerce; Dena Bank; Punjab & Sind Bank; Bank of Baroda; Central Bank of India, LIC, SIDBI; UCO Bank; Canara Bank; NABARD; Union Bank of India; Oriental Insurance; New India Insurance Co.; Andhra Bank, Allahabad Bank; Bank of Maharashtra; EXIM Bank; Indian Overseas Bank; United India Insurance Company Ltd., National Housing Bank; State Bank of Bikaner & Jaipur; State Bank of Hyderabad; State Bank of Mysore; State Bank of Patiala; State Bank of Travancore; Vijaya Bank and others,