Bank to set up panels for inspection of fraud cases

New Delhi: Following the Supreme Court judgement of March 27, 2023, the Reserve Bank of India (RBI) on Monday came up with the revised norms that lenders must follow before classifying loan accounts as fraud.

The apex bank issued its revised Master Directions on Fraud Risk Management for Regulated Entities (REs).

As per the revised directions, the lenders have to issue a detailed show-cause notice (SCN) to the persons or entities against whom the fraud allegations are labelled.

"Issuance of a detailed Show Cause Notice (SCN) to the Persons, Entities, and its Promoters/Whole-time and Executive Directors against whom allegation of fraud is being examined. The SCN shall provide complete details of transactions, actions, and events on which declaration and reporting of fraud is being contemplated under these Directions," the RBI's Master Directions document read. (IANS)

 Also Read: RBI issued three revised master directions on fraud risk management (sentinelassam.com)

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