Mumbai:
In a
recent communication to all commercial banks, the Reserve
Bank of India (RBI) said some banks have not been strictly
following instructions, particularly in connection with
record-keeping of cash deposits and withdrawals of Rs
10 lakh and above.
The RBI also mentioned that managers are not closely monitoring
cash withdrawals for large amounts and are not regular
in reporting such transactions to the controlling offices.
The RBI has asked all
commercial banks to ensure that no new accounts are opened by
banned organisations and advised them to strictly adhere to
guidelines of opening and monitoring accounts. The central bank
has also called for a closed-door meeting next week with bank
chiefs to discuss measures for preventing frauds.
The RBI has instructed
banks to adopt best practices as per the suggestion of the Dr N L
Mitra committee in 31 August 2001 on the legal aspect of bank
frauds. The committee said: "Every bank, financial
institution and financial intermediary should be required to
develop best practice code (BPC) within a time-frame and submit
the same to the regulator."
The
panel also pointed out the need for effective measures to
internalise BPC among staff, effectively supervise the
functionalisation of BPC, control and monitor variation from BPC,
enforce BPC in the use of discretionary power and make
documentation of the same, periodically review the use of
discretionary power, conduct periodical legal system, audit and
obtain compliance certification.
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