Brighter Kashmir: Srinagar: Tuesday, March 14, 2017.
ammu and Kashmir Bank has lost Rs. 1157.84 crore to 41 frauds during the last four years from 2013-14 to December 2016. However, the bank has started to regain its lost ground since the day new chairman Parvaiz Ahmed has taken the charge.
According to an official document of Reserve Bank of India (RBI), the hard-earned money of the commoners deposited in the banks has been lost by the bank not only to the VVIP customers but the employees of bank have also played active role in committing frauds worth crores of rupees. The bank on its part has stonewalled all efforts for being brought under the purview of the RTI act.
The RBI document reveals that 11 employees of Jammu and Kashmir Bank were also involved in bank having lost Rs. 1157.84 crore to 41 frauds during the last four years from 2013-14 to December 2016. The bank lost highest amount of Rs. 902.86 crore to the seven loan frauds in the year 2014-15 when the Chairman was Mushtaq Ahmed, a bank official who was known for his proximity with National Conference (NC) which was then in power.
These seven frauds were committed by VVIP customers. Though the bank claims that no official from the bank was found involved in these frauds but the fact remains that these loans were sanctioned were some of the so-called brightest Bank managers of the Bank. These included Managers of Residency Road Branch in Jammu and some other branches of Kashmir valley. During the tenure of Mushtaq Ahmed, JK Bank lost more than Rs. 1000 crore to the fraudsters.
In the year 2013-14, the Bank lost Rs. 66.2 lakh in 7 cases of fraud involving several VVIPs and 3 bank employees. This was followed by Bank loosing another Rs. 86.6 Lakh to 14 banking frauds involving 6 employees of the bank, whose identity has been kept secret by the top management of the bank, says the RBI document. During the current financial year, the bank has lost around Rs. 239.69 crore to the frauds with just 2 employees being allegedly involved in this huge fraud.
According to documents accessed from the Ministry of Finance, these losses are only due to frauds of Rs 1 lakh or more. Some of these cases are being probed by investigating agencies. Reserve Bank of India (RBI) has issued Master Direction on “Frauds-Classification and reporting” vide RBI.
DBS.CFMC.BC.No.1/23.04.001/2016-17 dated July 01, 2016 containing all the details/aspects relating to frauds. To compress the time taken in detection of fraud, a framework for handling loan frauds has been put in place.
According to the RBI, objective of this framework is to direct the focus of banks on the aspects relating to prevention, early detection, prompt reporting to the RBI and the investigative agencies (for instituting criminal proceedings against the fraudulent borrowers) and timely initiation of the staff accountability proceedings.
Sources said that the framework also seeks to stipulate time lines with the action incumbent on a bank. Further, the framework has also prohibited banks from extending bank finance to borrowers who have defaulted and also committed a fraud for five years from the date of full payment of the defrauded amount.
They added that on receipt of fraud reports from banks, various aspects related to the frauds are examined and concerned banks are advised to report the case to CBI, Serious Fraud Investigation Office, examine staff accountability, complete proceedings against the erring staff expeditiously, take steps to recover the amount involved in the fraud, claim insurance wherever applicable and streamline the system as also procedures so that frauds do not recur.
Though it is said that a whenever a complaint against a bank official(s) is received and any irregularities are found or observed on the part of Banks’ official (s), the Banks initiate action as per their extant rules and commensurate punishment is awarded to the delinquent employees based on the seriousness of the wrongdoings as per Bank’s disciplinary rules but the fact remains that Jammu and Kashmir Bank is yet to make any such thing public.