The findings have been shared with the Reserve Bank of India and Department of Financial Services
New Delhi: The Central Vigilance Commission (CVC) has classified and analysed top 100 banks frauds, dividing the fraudulence-prone companies into 13 different sectors such as gems and jewellery, media, agriculture, information and technology etc.
"The rising trend in bank frauds has been a cause of concern at all levels. In view of the alarming rise in Bank frauds, the Central Vigilance Commission has undertaken a review and analysis of top 100 Banks Frauds, as on 31 March.2017. The analysis mainly focused on the modus operandi, amount involved, type of lending viz. consortium/multiple/individual, anomalies observed, loopholes that facilitated the perpetration of concerned fraud and systemic improvements required to plug the loopholes in the system & procedures," CVC said in its report.
The findings have been shared with the Reserve Bank of India and the Department of Financial Services (Ministry of Finance).
"The companies deliberately inflated the valuation of diamonds with the mala fide intention to avail higher credit facilities from the lenders and also to indicate the security coverage available with the lenders. Export bills which remained unpaid on the due date were purchased by the consortium banks. Simultaneously, the disruption of the cash flow led to the devolvement of SBLCs and outstanding of cash credit remained unpaid," CVC said giving details about modus operandi used by gems and jewellery in industry.
Similarly, while giving the details about media industry CVC has said that the commission has analysed cases of frauds perpetrated by two companies in this sector. The companies were in the business of broadcasting on television channels, printing and publishing newspaper and periodicals. Their projects were financed by banks under a consortium led by one of the banks and the company also availed other credit facilities from various banks.
"Public money availed from banks in the form of loans had been diverted through shell companies. The loans were granted at the highest level by most of the banks. Bank financed one of the companies overseas and end use was not ensured. Instead, the funds were remitted to various other companies not connected with the related activities of the company," CVC said.
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