ADVISORY BOARD ON BANKING AND FINANCIAL FRAUDS

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Picture Courtesy: Hindustan Times

Context: The Central Vigilance Commission (CVC) has reconstituted the Advisory Board on Banking and Financial Frauds (ABBFF) to examine bank frauds before involving investigative agencies like the Central Bureau of Investigation (CBI). 

Details

• The reconstituted ABBFF is chaired by Suresh N Patel, former Central Vigilance Commissioner, along with four other members:
  • Ravikant, retired IAS officer
  • Rajnikant Mishra, former Director General, BSF
  • David Rasquinha, former MD of Exim Bank
  • Partha Pratim Sengupta, former MD & CEO of Indian Overseas Bank.

Advisory Board on Banking and Financial Frauds (ABBFF)

• Purpose and Scope: The primary purpose of the ABBFF is to provide advisory and consultative services in cases of significant fraud within the banking, insurance, and financial sectors. It aims to examine the roles and actions of officials, directors, and individuals associated with public sector banks, insurance companies, and financial institutions.
• Examination of Fraud Cases: The ABBFF conducts examinations of cases involving financial frauds that amount to ₹3 crore and above. It evaluates the involvement of officials and whole-time directors, including former officials and directors, to determine their roles in the fraudulent activities.
• Pre-Investigation Stage: Before cases are escalated to investigative agencies like the Central Bureau of Investigation (CBI), the ABBFF acts as a preliminary body to assess the situation and provide advice. This ensures that potential fraud cases are thoroughly examined before formal investigations are initiated.
• Referral and Advice: The Central Vigilance Commission (CVC) and the Central Bureau of Investigation (CBI) have the authority to refer cases or technical matters related to financial fraud to the ABBFF for advice. The board's expert input helps these agencies make informed decisions regarding the initiation of criminal investigations.
• Policy Formulation: The ABBFF contributes to the development of fraud-related policies within the financial sector. It provides recommendations and insights to key organizations such as the Reserve Bank of India (RBI) and the Central Vigilance Commission. This ensures that policies are well-informed and effective in preventing and managing fraud.
• Timely Advisory: The ABBFF operates with efficiency, aiming to provide its advice within a month of receiving initial references from relevant sources, including ministries, departments, the CVC, or the CBI.
• Composition: The ABBFF is composed of a Chairman and four other members. The tenure for both the Chairman and the Members is set at two years.

Conclusion

• The Advisory Board on Banking and Financial Frauds (ABBFF) plays a crucial role in the Indian financial sector by examining significant fraud cases, providing advisory services, and contributing to policy formulation for fraud prevention and management. It operates at the pre-investigation stage, working in collaboration with investigative agencies to ensure a comprehensive examination of fraud cases before formal actions are taken.

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CENTRAL VIGILANCE COMMISSION: https://www.iasgyan.in/daily-current-affairs/central-vigilance-commission-28

https://www.thehindubusinessline.com/money-and-banking/central-vigilance-commission-reconstitutes-advisory-board-on-bank-frauds/article67219688.ece