Parliamentary Panel Urges Law Ministry To Set Up Special Courts To Expedite Bank Fraud Disposal

The Parliamentary Committee on Government Assurances was informed of nine major PNB cases under investigation, involving Nirav Modi, Gitanjali, Kudos, ABG Shipyard, Jet, and others.

New Delhi: Following findings that banks are hesitating to give loans to common people due to pending fraud cases, a Parliamentary Committee has advised the Department of Financial Services (DFS) to suggest to the Ministry of Law and Justice to have special courts for faster disposal of bank fraud cases.

The committee was informed that 12 cases pertaining to bank fraud worth Rs 1,000 crore each are pending investigation by the CBI. The Parliamentary Committee on Government Assurances chaired by Rajya Sabha MP Dr M Thambidurai raised serious concerns following the fact that banks are hesitating to give loans to common people due to pending fraud cases.

The committee has also expressed concern over the plight of the common man in availing banking services, increasing spam calls for loans from agents of banks, online fraud faced by customers, not getting due benefits of credit facilities by SC/ST/OBC and women applicants, increasing NPAs in many banks.

The then DFS secretary Dr Vivek Joshi stated that the government is regularly following it up with the CBI for expeditious investigation and early trial into the bank fraud cases. Giving its reply to the committee on the steps taken to stop such incidents of fraud and provide benefits to the customers, Dr Vivek Joshi informed that sincere efforts have been taken in this regard and the matter has been routinely brought up with banks so as to bring about improvement in inter-personal skills of bank staff.

“Public sector banks are now taking advantage of the online systems so that the customers need not come to the bank to avail the services,” he said. About the issue of some bank staff hesitating to give loans, the secretary informed that some framework has been put by the banks as per the guidance given by the Government about staff accountability.

“In normal cases, no staff accountability is fixed up to the loan of Rs 10 lakhs. In the case of NPAs amounting to more than Rs 10 lakhs, prior approval from the competent authority is required to be taken before investigating the officer and prosecuting him. The same yardsticks apply to the private sector banks and RBI strictly monitors those banks,” Dr Joshi said.

The committee was informed that there are nine cases pertaining to Punjab National Bank (PNB) which are under investigation which involve Nirav Modi, Geetanjali, Kudos Chemicals, Winsome Diamonds, Diwan, ABG Shipyard, Jet and Bhushan Steel.

There are several cases involving amounts of more than Rs 3 crore related to the Bank of Baroda. There are eight cases of a bank scam related to the Indian Bank involving more than Rs 1,000 crore, which are under investigation. The bank fraud cases are also being investigated by other investigative agencies.