CBI director Anil Sinha on Tuesday called for strengthening the accountability mechanism in banks to combat financial crimes. Mr Sinha was speaking at a conference co-hosted by CBI and Indian Banks’ Association, Mumbai. The conference was inaugurated by chief minister Devendra Fadnavis and attended by CMDs and top officials of State Bank of India, PSU banks, private banks and other financial institutions.
CBI officials said the number of bank frauds and financial crimes taken up by the agency is on the rise. CBI investigated 171 cases of bank fraud in 2015, involving funds worth Rs 20,646 crore. Therefore, there is need to improve resources and expertise to deal with growing instances of complex bank fraud and financial crimes. Mr Sinha said when bank authorities ignored small frauds and failed to file complaints, fraudsters were encouraged to do bigger frauds.
A large part of such funds move outside the country to tax havens through Hawala and other unofficial channels. As a result of these limitations, CBI investigations are hampered. The accountability mechanism in banks and financial institutions is weak and diffused and in the end, no one seems accountable. The message to the public is that the rich and powerful are able to avoid the consequences of cheating and fraud while ordinary citizens are promptly booked. This undermines people’s faith in the rule of law, said Mr Sinha. “The accountability mechanism in banks and financial institutions is so weak and diffused that in the end, no one seems accountable,” he stressed.
Citing examples of Kingfisher and PACL, Mr Sinha said that despite CBI’s repeated requests, banks did not file a complaint with CBI in the Kingfisher Airlines case. “The undue delay in identifying and reporting such a fraud has jeopardised the cause of justice, giving offenders an opportunity to divert funds and destroy evidence,” he said.
On its part, CBI is getting 375 of its officials and lawyers trained at the National Law School, Bangalore, to tackle financial fraud and cyber-crime. The bureau is also working with IIM-Bangalore to train its officials in financial matters.
