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Banks weighing central database of fraud attempts

Banks wish to arrange a central of debtors who’ve tried fraud. The database may additionally have particulars about these shoppers who withheld data or manipulated their books to be able to safe lending from totally different lenders.

A senior financial institution govt stated such a database shall be on strains of the Central Fraud Registry (CFR) arrange by the Reserve Bank and may have participation from each private and non-private banks. “Some preliminary discussions have taken place, we’re but to finalise the construction,” he stated.

Underneath present norms, banks needn’t report instances of tried frauds to RBI however they should place the report on particular person instances of tried fraud involving an quantity of ₹1 crore and above earlier than the audit committee of their board.

CFR, a web-based and searchable database, is about up by the regulator based mostly on the fraud monitoring returns, filed by the banks and the choose monetary establishments.

Banks have been suggested by the RBI to place in place correct methods and procedures to make sure that the knowledge obtainable via the database is made use of as part of the credit score danger governance and fraud danger administration.

One other govt conscious of the developments stated that each company and retail debtors could be part of this new database.

Specialists really feel that such a database will assist real debtors and banks in the long term. “It is going to discourage debtors who would now know that in search of credit score via unscrupulous means might cease their entry from all banks and FIs,” stated Hitesh Pandey, chief govt at Synemerge Options, an advisory agency.

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