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Advisory board on bank frauds

Facts for Prelims (FFP)


Source: Business Line

 Context: The Central Vigilance Commission (CVC) has reconstituted the advisory board on Banking and Financial Frauds (ABBFF), responsible for conducting initial examinations of bank frauds before recommending further investigation by agencies like the Central Bureau of Investigation (CBI).

  • The ABBFF’s authority encompasses examining the roles of officials and whole-time directors in public sector banks, insurance companies, and financial institutions when frauds amounting to ₹3 crores and above occur.

The CVC now requires all these entities to refer matters involving such fraud amounts to the ABBFF for advice before initiating criminal investigations. The ABBFF is also authorized to conduct periodic fraud analysis within the financial system, providing inputs for fraud-related policy formulation to the RBI and CVC.

 The ABBFF, headquartered in New Delhi, is mandated to provide advice within a month of receiving initial references from the Ministry, Department, CVC, or investigative agencies. Notably, the suggestion from the Indian Banks Association (IBA) for introducing a “sunset clause” to limit actions against bankers for credit decisions after a specific period hasn’t been accepted by the CVC.