Page 12 - Banking Finance August 2024

RBI CORNER

"One area that has come into sharper mated at 6% in 2023-24, higher than closely with financial institutions and
focus in the last couple of years is the the 3.2% recorded in 2022-23, accord- technology security firms to crack
control and management of internal ing to the report, which measures in- down on such bank accounts.
accounts. We found certain banks hav- dustry productivity and employment.
ing lakhs of such accounts with appar- This is the first time that RBI has tried Retired financial profes-
ently no valid reason," RBI deputy gov- to extrapolate a provisional estimate sional duped of Rs 2 crore
ernor Swaminathan J said in his address of productivity for fiscal year 2023-24,
to the lenders. using available numbers. in stock market fraud in
"Some of these accounts are also used Mumbai
The central bank has issued provisional
as a conduit for certain fraudulent trans- numbers in its report, which aims to The Mumbai crime branch's cyber po-
actions and evergreening of loan ac- measure productivity across 27 indus- lice have arrested a 51-year-old
counts. Internal accounts are high risk in
tries that are aggregated to form six painter from Ghatkopar for his alleged
nature on account of their potential for broad sectors, including agriculture, role in duping a 71-year-old retired fi-
misuse," he said while asking the CFOs
hunting, forestry and fishing, mining nancial professional of nearly Rs 2
to rationalise those accounts and bring
and quarrying, manufacturing, elec- crore under the pretext of earning
them down to the essential minimum. tricity, gas and water supply, construc- high returns by investing in the stock
tion and services. market.
Reserve Bank of India re-
The police said the fraudsters had even
vises fraud norms RBI governor Das tells created an application similar to a well-
RBI issued three revised master direc- bankers to step up action known investment company to lure
tions on fraud risk management for people into investing. According to the
Regulated Entities such as commercial on mule accts police, the victim invested money be-
banks including regional rural banks Reserve Bank of India governor tween January 8 and March 7 this year.
and All India Financial Institutions; ur- Shaktikanta Das urged heads of select
ban, state and central cooperative public and private sector banks to step RBI mulling insurance for
banks; and non-banking finance firms up efforts against mule accounts and green deposits
and housing finance companies. asked them to intensify efforts to curb
digital frauds. RBI is exploring appropriate deposit
"These master directions have been insurance coverage for green deposits,
prepared based on a comprehensive In a meeting with the bank chiefs, climate risk-based differential premi-
review of the earlier Master Direc- which was also attended by RBI deputy ums and ex ante funding needs for cli-
tions, circular and emerging issues. governors M. Rajeshwar Rao and mate sustainability, according to
These Master Directions are principle- Swaminathan J., Das emphasized the Michael Debabrata Patra, Deputy Gov-
based and strengthen the role of the need for lenders to ensure robust ernor.
Board in overall governance and over- cybersecurity controls and asked them
sight of fraud risk management in the to effectively manage third-party risks. "Looking ahead, the evolution of the
Regulated Entities (REs)," the RBI said He also highlighted the importance of deposit insurance function is likely to
in a circular. further strengthening the governance confront more complex challenges
standards, risk management practices amidst heightened uncertainty."
India added 4.7 crore jobs and compliance culture in banks. "For instance, climate change is

in FY24: RBI data Mule accounts are bank accounts that emerging as an overarching risk to the
serve as conduits in money-laundering global economy and financial systems,"
India added nearly 4.7 crore jobs in the process, receiving funds from illicit ac- Patra said, in his keynote address at
2023-24 fiscal year, a Reserve Bank of
tivities and then transferring them to the 79th Executive Committee Meet-
India report showed, higher than sev-
other destinations. The RBI, National ing of International Association of
eral other estimates. Payments Corporation of India, and the Deposit Insurers (IADI) at Rome on
Employment growth rate was esti- ministry of home affairs are working June 14.

BANKING FINANCE | AUGUST | 2024 | 11