Lok Sabha Question No. 834 (UNSTARRED), answered on 2018-12-14
Subject: Enquiries Initiated against Bank Officials
Ministry: FINANCE
Asked by: A.P. JITHENDER REDDY

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO 834

TO BE ANSWERED ON THE 14 TH  DECEMBER, 2018 / AGRAHAYANA 23, 1940 (SAKA)

## Enquiries Initiated against Bank Officials

834. SHRI A.P. JITHENDER REDDY:

Will the Minister of FINANCE be pleased to state:

- (a)   the  number  of  investigative  agencies  led  enquiries  against  bank  officials  who used       managerial discretion without due diligence in issuing loans; (b)  number  of  bank  frauds  noted  since  2014  along  with  the  number  of  enquiries launched  and  action  taken,  against  auditors  who  failed  to  bring  fraudulent transactions to notice; (c)  whether  the  Government  intend  to  make  Quality  Review  Board  of  Institute  of Chartered Accountants of India (ICAI) independent authority, instead maintaining it as a department under ICAI due to inherent conflict of interest, if so, the details thereof and the steps taken and deadline set, in achieving this goal; (d) the  details  of  structural  reforms  initiated  in  banks  to  ensure  Non  Performing Assets do not pile up again after recapitalisation; and (e)   the direct effect of recapitalisation of banks on fiscal deficit of country and the
- steps taken to counter resulting fiscal deficit?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

(a) Central Bureau of Investigation has intimated that a total of 273 (268 Regular Cases and 05 Preliminary Enquiry cases) have been registered by CBI relating to corruption in banks during the year 2017 and 2018 (upto 30.06.2018).

(b) Data provided by Reserve Bank of India (RBI) in respect of number of fraud cases (Amount involved in individual cases Rs 1 lakh and above) and action taken on the bank officials  involved  during  the  period  2015-2017  is  at  Annexure.For  enforcement  of auditing standards  and  ensuring  the  quality of audits,  Government  has  initiated establishment of National Financial Reporting Authority as an independent regulator. (c) Ministry  of  Corporate  Affairs  has  informed  that  there  is  no  proposal  under  their consideration at present

(d) A  number  of  steps  have  been  taken  to  comprehensively  address  Non  Performing Assets (NPAs) in banks. Reforms have been initiated in Public Sector Banks under the PSB Reforms Agenda announced by the Government in January 2017. These will help avoid recurrence of a situation of high NPAs and enable resolution / recovery in respect of NPA accounts.

PSBs are committed to implement the following reforms in this direction -

- (a)  number  of  lenders  in  consortium  restricted  by  requiring  minimum  of  10%,  for better managed consortium lending,
- (b)  ring-fencing of cash flows for prudent lending,
- (c) monitoring  of  loans  above  Rs.  250  crore  through  specialized  agencies  for effective vigilance
- (d)  use  of  technology  and  analytics  for  comprehensive  due-diligence  across  data sources,
- (e)  comprehensive checking of all accounts of Rs. 50 crore and above that turn NPA for wilful default and fraud,
- (f)   strict enforcement of conditions of loan sanction,
- (g)  establishment  of  stressed  asset  management  verticals  in  banks  for  focused recovery and timely and effective management of stressed accounts, and
- (h)  Collection of passport details of borrowers for loan above Rs. 50 crore.

(e) The servicing   of  the  securities  issued  for  capital  infusion  in  public  sector  banks (PSBs) impacts the fiscal deficit in the year of issue and subsequently. This also further enhances the debt of the Government to the extent of the nominal value of securities.

ANNEXURE

## Bank-wise data on number of staff side action initiated/taken against bank employees involved in frauds (Amount involved>= 1 Lakh) reported by banks 2015-2017

| Bank Name                                                    | Number of staff action taken   | Number of staff action taken   | Number of staff action taken   | Total Number of staff action taken   |
|--------------------------------------------------------------|--------------------------------|--------------------------------|--------------------------------|--------------------------------------|
|                                                              | 2015                           | 2016                           | 2017                           |                                      |
| ALLAHABAD BANK AMERICAN EXPRESS BANKING CORP.                | 74 1                           | 116 1                          | 121 11                         | 311 13                               |
| ANDHRA BANK                                                  | 115                            | 124                            | 77                             | 316                                  |
| AXIS BANK LIMITED                                            | 141                            | 160                            | 306                            | 607                                  |
| BANDHAN BANK LIMITED                                         |                                | 41                             | 98                             | 139                                  |
| BANK OF BARODA                                               | 312                            | 225                            | 137                            | 674                                  |
| BANK OF INDIA                                                | 11                             | 8                              | 14                             | 33                                   |
| BANK OF MAHARASHTRA                                          | 30                             | 22                             | 56                             | 108                                  |
| CANARA BANK                                                  | 111                            | 291                            | 216                            | 618                                  |
| CATHOLIC SYRIAN BANK LTD                                     | 32                             | 36                             | 36                             | 104                                  |
| CENTRAL BANK OF INDIA                                        | 322                            | 274                            | 132                            | 728                                  |
| CITIBANK N.A                                                 |                                | 2                              |                                |                                      |
|                                                              |                                |                                |                                | 2                                    |
| CITY UNION BANK LIMITED                                      | 11                             | 1                              | 6                              | 18                                   |
| CORPORATION BANK                                             | 243                            | 124                            | 148                            | 515                                  |
| DBS BANK LTD.                                                | 1                              |                                |                                | 1                                    |
| DCB BANK LIMITED                                             |                                |                                | 1                              | 1                                    |
| DENA BANK DOHA BANK QSC                                      | 70                             | 81 1                           | 95                             | 246 1                                |
| EQUITAS SMALL FINANCE BANK LIMITED                           |                                | 1                              | 14                             | 15                                   |
| EXPORT IMPORT BANK OF INDIA                                  |                                | 2                              |                                | 2                                    |
| FEDERAL BANK LTD                                             | 34                             | 67                             | 3                              | 104                                  |
| HDFC BANK LTD.                                               | 2                              | 11                             | 1                              | 14                                   |
| HONGKONG AND SHANGHAI BANKING CORPN.LTD.                     |                                |                                | 2                              | 2                                    |
| ICICI BANK LIMITED                                           | 732                            | 625                            | 879                            | 2236                                 |
| IDBI BANK LIMITED                                            | 83                             | 82                             | 3                              | 168                                  |
| INDIAN BANK                                                  | 209                            | 135                            | 105                            | 449                                  |
| INDIAN OVERSEAS BANK                                         | 284                            | 41                             | 18                             | 343                                  |
| INDUSIND BANK LTD                                            | 8                              | 17                             | 11                             | 36                                   |
| ING VYSYA BANK LTD                                           | 11                             |                                |                                | 11                                   |
| JAMMU & KASHMIR BANK LTD                                     | 18                             | 16                             | 61                             | 95                                   |
| KARNATAKA BANK LTD                                           | 24                             | 35                             | 11                             | 70                                   |
| KARURVYSYA BANK LTD                                          | 4                              | 6                              | 3                              | 13                                   |
| KOTAK MAHINDRA BANK LTD.                                     | 3                              | 13                             | 61                             | 77                                   |
| KRISHNA BHIMASAMRUDDHI LAB LTD.                              |                                |                                | 1                              | 1                                    |
| LAKSHMI VILAS BANK LTD                                       | 29                             | 16                             | 47                             | 92                                   |
| NAINITAL BANK LTD                                            | 4                              |                                | 6                              | 10                                   |
| ORIENTAL BANK OF COMMERCE                                    | 196                            | 80                             | 12                             | 288                                  |
| PUNJAB AND SIND BANK                                         | 40                             | 12                             | 34                             | 86                                   |
| PUNJAB NATIONAL BANK                                         | 420                            | 331                            | 376                            | 1127                                 |
| RBL BANK LIMITED                                             |                                | 5                              |                                | 5                                    |
| SBM BANK (MAURITIUS)LTD. SMALL INDUSTRIES DEV. BANK OF INDIA | 7                              | 4                              | 1                              | 1 11                                 |
| SOUTH INDIAN BANK LTD                                        | 27                             | 20                             | 19                             | 66                                   |
| STANDARD CHARTERED BANK                                      | 5                              |                                | 1                              | 6                                    |
| STATE BANK OF BIKANER AND JAIPUR                             | 99                             | 67                             | 6                              | 172                                  |
| STATE BANK OF HYDERABAD                                      | 36                             | 44                             | 12                             | 92                                   |
| STATE BANK OF INDIA                                          | 698                            | 338                            | 251                            | 1287                                 |
| STATE BANK OF MYSORE                                         | 1                              | 9                              |                                | 10                                   |
| STATE BANK OF PATIALA                                        | 75                             | 75                             | 3                              | 153                                  |
| STATE BANK OF TRAVANCORE                                     | 42                             | 72                             | 2                              | 116                                  |
| SUBHADRA LOCAL AREA BANK LTD.                                |                                |                                | 1                              | 1                                    |
| SYNDICATE BANK                                               | 599                            | 219                            | 76                             | 894                                  |
| TAMILNAD MERCANTILE BANK LTD                                 | 20                             | 26                             | 12                             | 58                                   |
| THE DHANALAKSHMI BANK LTD                                    | 14                             | 26                             | 1                              | 41                                   |
| THE INDUSTRIAL FINANCE CORP OF INDIA LTD                     |                                | 1                              |                                | 1                                    |
| UCO BANK                                                     | 152                            | 321                            | 82                             | 555                                  |
| UNION BANK OF INDIA                                          | 181                            | 66                             | 30                             | 277                                  |
| UNITED BANK OF INDIA                                         | 219                            | 67                             | 96                             | 382                                  |
| VIJAYA BANK YES BANK LTD.                                    | 12                             | 2                              | 5                              | 19                                   |
| Grand Total                                                  | 23 5785                        | 1 4360                         | 104 3804                       | 128 13949                            |

Source: RBI