What changed
The Master Circular consolidates all instructions issued since July 1, 2008, including clarifications from the past year. It updates the reporting framework for frauds, emphasizing timely submission and complete information to RBI.
What it means for you
Banks face stricter compliance on fraud reporting timelines, with potential penal action under Section 47(A) of the Banking Regulation Act, 1949 for delays. The circular reinforces the need for internal checks and prompt alerts to prevent similar frauds across the system.
What you must do
- Streamline internal fraud reporting processes to ensure timely submission to RBI.
- Fix staff accountability for delays in reporting fraud cases.
- Adhere strictly to the prescribed timeframe for fraud reporting to avoid penal action.
- Submit FMR-1 return in both hard and soft copy; other returns in soft copy only.
- Ensure complete information is provided in all fraud reports.
Who it affects
All commercial banks (excluding RRBs), Financial institutions, Bank board and special committee for frauds over Rs. 1 crore
What is the key update in this Master Circular?
It consolidates all fraud reporting instructions issued since July 1, 2008, including clarifications, and emphasizes timely reporting with staff accountability.
What are the penalties for delayed fraud reporting?
Banks are liable for penal action under Section 47(A) of the Banking Regulation Act, 1949 for delays in reporting frauds to RBI.
Which frauds require reporting to the board's special committee?
Frauds involving Rs. 1.00 crore and above must be reported to a special committee of the board.