The Reserve Bank of India (RBI) is the regulator and supervisor of the banking system, as per power conferred by relevant provisions of the Banking Regulation Act, 1949, the Reserve Bank Of India Act, 1934, and other relevant statutes. RBI has informed that the guidelines/norms and procedure for Audits have been issued by RBI, in consultation with Government of India. Accordingly, banks are to put in place appropriate control and audit procedures for their business activities. Public sector Banks (PSBs) are subject to annual Statutory Central Audit and Statutory Branch Audit. In addition, Risk-Based Internal Audit and Concurrent Audit are undertaken by all PSBs in terms of RBI guidelines. Further, quarterly review of accounts is conducted by Statutory Central Auditors. Stock Audit is undertaken by banks as per their policies. RBI has further apprised that, in the wake of SWIFT-related fraud involving significant amount reported recently by Punjab National Bank (PNB), it has constituted an Expert Committee, to look into, inter alia, the factors leading to an increasing incidence of frauds, and the role and effectiveness of various types of audits conducted in banks in mitigating the incidence of such frauds.
With regard to details concerning ensuring that defaulters do not flee to foreign country, the Ministry of External Affairs (MEA) has informed that in case requests are received from agencies concerned for revoking or suspending passports of defaulters, the same is carried out expeditiously in MEA. Further, in order to deter Economic Offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, Government has introduced the FUGITIVE ECONOMIC OFFENDERs Bill, 2018 in Parliament. The bill provide for attachment of property of a fugitive economic offender, confiscation of such offender’s property, and disentitlement of the offender from defending any civil claim. In addition, with a view to enable banks to inform relevant authorities of passport details, if need arises, Government has advised all Public Sector Banks to obtain a certified copy of the passport of the promoters/directors and other authorised signatories of companies availing of loan facilities of Rs. 50 crore and above. The advisory further states that in existing cases, where loans of Rs. 50 crore and above are given, banks may collect passport details.
This was stated by Shri Shiv Pratap Shukla, Minister of State for finance in a written reply to a question in Lok Sabha today.
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