Probity watchdog Central Vigilance Commission (CVC) has completed a first-of-its-kind analysis of the top 100 banking frauds, including those in the jewellery and aviation sectors, and shared its findings with the RBI, ED and CBI among others. These studies have been done by CVC conducted these studies as a preventive vigilance tool.

The analysis focussed on the modus operandi, amount involved, type of lending (viz. consortium or individual), anomalies observed, loopholes that facilitated perpetration of the fraud concerned and the systemic improvements required to plug the gaps in the system and procedures. The frauds were classified and analysed for 13 sectors including gem and jewellery, manufacturing and industry, agro, media, aviation, service and project, discounting of cheques, trading, information technology, export business, fixed deposits, demand loan and letter of comfort.

The modus operandi of these top 100 loans has been thoroughly analysed and various loopholes or lapses have been identified. Based on the findings, various industry specific suggestions for systemic improvement have been given in the final report, which have also been sent to the Department of Financial Services and RBI (Reserve Bank of India), in order to plug the loopholes observed by the Commission. The measures suggested include strengthening of standard operating procedures (SOPs) and the monitoring system, and also highlighting the role of controlling offices, so as to examine the aspect of quality of business.

RBI has reportedly found the inputs useful for systemic improvements to mitigate the risks. CVC Member T M Bhasin, a former CMD of Indian Bank, said the intention of the commission was to bring about awareness among the field functionaries by enhancing their knowledge towards the existing lapses, so that frauds of similar nature do not recur.