Banks weighing the central database of fraud attempts

Banks seek to set up a pool of borrowers who have attempted to defraud. The database may also contain details of customers who hid information or manipulated their books in order to obtain loans from different lenders.

A senior bank official said such a database will be on the lines of the Central Fraud Registry (CFR) set up by the Reserve Bank and will have the participation of public and private banks. “Preliminary discussions have taken place, we still have to finalize the structure,” he said.

According to the existing standards, banks are not required to report attempted fraud cases to the RBI, but they must file the report on individual cases of attempted fraud involving amount of ₹1 crore and above before the reporting committee. audit of their board of directors.

The CFR, an online and searchable database, is set up by the regulator based on fraud monitoring reports, filed by selected banks and financial institutions.

The RBI has advised banks to put in place appropriate systems and procedures to ensure that the information available through the database is used for credit risk governance and fraud risk management.

Another executive familiar with the developments said corporate and retail borrowers can be part of this new database.

Experts believe that such a database will help real borrowers and banks in the long run. “This will discourage borrowers who would now know that seeking credit through unscrupulous means can prevent their access to all banks and financial institutions,” said Hitesh Pandey, managing director of Synemerge Solutions, an advisory firm.

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