With an increase in the number of instances of banks being cheated, the Finance Ministry recently issued a warning to the chief executives of PSBs (public sector banks). According to a report by The Times of India, the Ministry has asked the heads of PSBs to monitor and track all NPA accounts which are in excess of Rs.50 crore.
Failing to do so could result in the chief executives facing criminal conspiracy charges. The recent case involving the arrest of Neeraj Singal, the former promoter of Bhushan Steel prompted the Finance Ministry to issue this notice.
According to the report by The Times of India, bankers who fail to report fraud can be held liable under Section 120B of the IPC. The advisory is aimed at helping bankers take extra precaution against instances of fraud.
Non-performing assets of public sector banks have reached new highs, with NPAs amounting to Rs.8 lakh crore.
A number of frauds involve diversion of money to other accounts.
The RBI, in 2017, found that 12 stressed accounts accounted for 25 per cent of the total NPAs of banks.
Sources: The Times of India