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January 15, 2022

Advisory Board for Banking and Financial Frauds – Extension of Scope – Rs. 3 cr to 50 cr

by CA Shivam Jaiswal in Corporate Law

Advisory Board for Banking and Financial Frauds – Extension of Scope – Rs. 3 cr to 50 cr

Government of India

Ministry of Finance

Department of Financial Services

To

  1. Chairman, State Bank of India
  2. Chairman, Life Insurance Corporation of India
  3. MD & CEOs of all Public Sector Banks
  4. CMDs in all Public Sector Financial Institutions
  5. CMDs of all non-life Public Sector Insurance Companies
  6. CVOs of all Public Sector Banks/Financial Institutions/Insurance Companies

Sub: Advisory Board for Banking and Financial Frauds (ABBFF) — Extension of Scope — Rs. 3 crores to Rs.50 crores — reg.

Madam/Sir,

I am directed to say that in order to alleviate fear of any unwarranted hardship to decisions of officials/Executives of PSBs and PSFIs, Central Vigilance Commission vide Office Order No. 02/01/22 issued vide No. 006/MSC/038 dated 06.01.2022 [copy enclosed], in consultation with Reserve Bank of India and Department of Financial Services, has extended the scope of the existing Advisory Board for Banking and Financial Frauds (ABBFF) to cover all fraud cases involving amount of Rs. 3 Crore and above and examine the role of all levels of officials/Whole Time Directors (including ex-officials/ex-WTDs) in Public Sector Banks and Public Sector Financial Institutions.

2. Henceforth, all Public Sector Banks, Public Sector Financial Institutions and Public Sector Insurance Companies [life insurance/non-life insurance] shall now scrupulously adhere to the following instructions in case of the matters cited in the subject above:

Cases to be referred to ABBFF:

(a) The ABBFF will examine all cases of total amount involving Rs.3.00 Crore and up to Rs.50.00 Crore also, which are classified as Fraud and reported to RBI by PSBs and in case of PSFIs, fraud declared, on or after 06.01.2022.

(b) The cases of total amount involving Rs.3.00 Crore and up to Rs.50.00 Crore, which are classified as Fraud and reported to RBI by PSBs and in case of PSFIs, declared as fraud prior to 06.01.2022 but have reached the Disciplinary Authority through IAC and CVO on or after 06.01.2022, shall also be referred to ABBFF.

(c) The cases of total amount involving Rs. 3.00 Crore and up to Rs. 50.00 Crore, where FMR is filed by PSBs or declared as fraud by PSFIs prior to 06.01.2022 but criminal complaint is yet to be filed with the investigating agencies, are also to be reported to ABBFF.

Terms & Conditions:

All other terms and conditions of CVC Office Order No. 14/08/27 dated 79.08.2027 shall remain the same.

SOP:

SOP for making references to ABBFF issued vide e-mail dated 76/17.09.2021 and addendum vide letter 006/MSC/038,496385 dated 70.17.2027 for fraud cases above Rs.50.00 Crore shall also be applicable to the fraud cases of Rs.3.00 Crore and up to Rs.50.00 Crore.

3. These instructions shall be disseminated to officers/officials of all levels in the institution.

4. Strict compliance of the above may be ensured.

CENTRAL VIGILANCE COMMISSION

Satarkta Bhawan,–G.P.O. Complex,

Block A, INA, New Delhi-10023

Office Order No. 02/01/22

Subject: ADVISORY BOARD FOR BANKING AND FINANCIAL FRAUDS (ABBFF)-EXTENSION OF SCOPE

Reference: – (i) CVC Office Memorandum No. 98/Misc/I dated 26.02.1999

(ii) CVC Office Memorandum No. 99/VGL/54 dated 08.08.2000

(iii) CVC Office Order No. 003/VGL/1 (Part) dated 05.07.2001

(iv) CVC Office Order No. 05/03/12 on F. No. 006/MSC/38 dated 26.03.2012

(v) CVC Office Order No. 05/09/14 on F. No.006/MSC/038/259085 dated 02.09.2014 (vi) CVC Office Order No. 06/08/19 on F. No. 006/MSC/038 (Part)/429692 Dated 21.08.2019

(vii) CVC Office Order No. 01/01/2020 dated 15.01.2020 on F. No. 006/MSC/038 (Part)/445413

(viii) CVC Office Order No. 14/08/21 dated 19.08.2021 on F. No. 006/MSC/038 (Part) 489810

(ix) CVC Addendum dated 10.11.2021 on F. No. 006/MSC/038/4986385 Dated 10.11.2021 The CVC Office order No. 06/08/19 dated 21.08.2019 entails that the ABBFF will be conducting first level of examination in all large fraud cases (of above Rs.50 Crore) before recommendations or references are made to investigative agencies such as Central Bureau of Investigation (CBI) by the respective Public Sector Banks (PSBs), involving officers of the level of General Managers and above. Vide Office Order No. 01/01/2020 dated 15.02.2020, the scope of ABBFF was extended to cover Public Financial Institutions also. Further vide Order No. 14/08/21 dated 19.08.2021, the Commission extended the tenure of its Chairman/ Members for two years from 21.082021 on the existing terms and conditions, and jurisdiction of ABBFF was extended to examine the role of all level of officials/Whole Time Directors including ex officials/ ex Whole Time Directors.

2. The Commission in consultation with Reserve Bank of India and Department of Financial Services, hereby extends the scope of the existing ABBFF to cover all fraud cases involving amount of Rs.3 Crore and above and examine the role of all levels of officials/Whole Time Directors (including ex-officials/ex-WTDs) in Public Sector Banks and Public Sector Financial Institutions.

3. The following are to be noted: (a) The ABBFF will examine all cases of total amount involving Rs.3.00 Crore and up to Rs.50.00 Crore also, which are classified as Fraud and reported to RBI by PSBs and in case of PSFIs, fraud declared, on or after 06.01.2022. (b) The cases of total amount involving Rs.3.00 Crore and up to Rs.50.00 Crore, which are classified as Fraud and reported to RBI by PSBs and in case of PSFIs, declared as fraud prior to 06.01.2022 but have reached the Disciplinary Authority through IAC and CVO on or after 06.01.2022, shall also be referred to ABBFF. (c) The cases of total amount involving Rs.3.00 Crore and up to Rs.50.00 Crore, where FMR is filed by PSBs or declared as fraud by PSFIs prior to 06.01.2022 but criminal complaint is yet to be filed with the investigating agencies, are also to be reported to ABBFF.

4. All other terms and conditions of CVC Office Order No. 14/08/21 dated 19.08.2021 shall remain the same.

5. SOP for making references to ABBFF issued “side e-mail dated 16/17.09.2021 and addendum vide letter 006/MSC/038/496385 dated 10.11.2021 for fraud cases above Rs.50.00 Crore shall also be applicable to the fraud cases of Rs.3.00 Crore and up to Rs.50.00 Crore.

6. Depending on the number of cases, separate Boards for cases involving frauds of total amount Rs.3.00 Crore and up to Rs.50.00 Crore may be formed in future.

7. The Commission in consultation with RBI & ABBFF will appoint a Secretary to the Board on a part time basis, with a fixed remuneration from the pool of retired officers from PSBs having adequate experience and understanding in handling areas of vigilance, fraud, and credit matters.

(P. Daniel) Addl. Secretary

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