Gives earful to top banks and financial institutions on financial scams, frauds
Mumbai : CBI Director Anil Sinha on Wednesday gave an earful to chiefs of top banks and financial institutions for the crises and scams plaguing the country’s banking and financial sectors.
In a no-holds barred speech in the presence of Maharashtra Chief Minister Devendra Fadnavis, the Central Bureau of Investigation chief said the crisis in the banking and financial system ‘runs deep’.
He said there was growing anguish among the public that while banks were strict on small/retail borrowers, the big borrowers and those who committed fraud on a large scale not only escaped the law but enjoyed the fruits of their crimes.
“Something is seriously wrong. While bank loan defaults can happen due to business risk and reasons beyond the control of banks, borrowers and regulators, yet a significant part of the defaults are willful and fraudulent.
“What causes greater concern is that a major part of the Non-Productive Assets and frauds are in large-value accounts,” Sinha asserted as top banking and financial institutions’ heads listened in rapt attention.
Added to this was the “unduly slow and long process” by which such loans and advances are ‘red-flagged’, declared NPAs, willful defaulters and finally as fraudulent by the banks, Sinha said at the 7th conference of CBI and Indian Banks Association on ‘Combating Financial Crimes’.
“This whole process is so time consuming that it allows such large borrowers ample time to walk away with the funds. A large part of such funds move outside the country to tax havens through hawala and other unofficial channels,” Sinha said. Under such circumstances, coupled with “weak and diffused accountability mechanisms in banks and financial institutions”, CBI investigations are grossly hampered and “no one seems accountable”, the central agency’s chief said.
