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Banks weighing central database of fraud attempts
May 10, 2022
Banks are looking to set up a central database of borrowers who have attempted fraud. The database may likewise have details about those clients who kept data or manipulated their books in order to secure lending from different lenders.
A senior bank chief said such a data set will be on the lines of the Central Fraud Registry (CFR) set up by the Reserve Bank and will have participation from both public and private banks. “Some preliminary discussions have occurred, we are yet to finalize the structure,” he said.
Under existing norms, banks need not report cases of attempted fraud to RBI yet they need to put the report on individual cases of attempted fraud involving a measure of ₹1 crore and above before the audit committee of their board.
CFR, a web-based and searchable database, will be set up by the controller in view of the fraud monitoring returns, filed by the banks and the select financial institutions.
Banks have been advised by the RBI to put in place proper systems and procedures to guarantee that the information available through the database is used as a part of the credit risk governance and fraud risk management.
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