CVC Reconstitutes Advisory Board on Banking and Financial Frauds

• 25 Aug 2023

Recently, the Central Vigilance Commission (CVC) took steps to reconstitute the advisory board responsible for conducting preliminary examinations of bank frauds, before passing on recommendations to investigative agencies like the Central Bureau of Investigation (CBI).

Key Points:

• Reconstitution of ABBFF: The reconstituted Advisory Board on Banking and Financial Frauds (ABBFF) will now be led by Suresh N Patel, former Central Vigilance Commissioner.
• Alongside the Chairman, there are four Members, all serving a two-year tenure starting from August 21, as stated in the CVC's official order.
• Mandatory Referral to ABBFF: All matters of fraud involving Rs. 3 crore and above must be referred to the advisory board for advice by public sector banks, public sector insurance companies, and public sector financial institutions.
• This is to be done before initiating criminal investigation, and the advice provided by ABBFF should be considered by the competent authority.
• Additional Referral Authority: CVC or CBI can also seek advice from ABBFF for any case or technical matter related to fraud.
• Frauds Analysis and Policy Input: ABBFF is empowered to conduct periodic analysis of frauds within the financial system and provide inputs for policy formulation regarding frauds to RBI and CVC.
• Location and Timelines: Headquartered in New Delhi, ABBFF is expected to provide requested advice within a month of receiving the initial reference from the Ministry/Department/CVC or the investigation agency, including the Delhi Special Police Establishment.
• Sunset Clause Not Implemented: CVC did not implement the Indian Banks Association's (IBA) suggestion of a sunset clause, which would have limited action against bankers for credit decisions after a certain period.