What changed
RBI amended paragraphs 5.2.1, 5.2.3, and 5.3.1 of the July 2012 Master Circular on frauds. Quarterly fraud reviews for June, September, and December must now be placed before the Audit Committee in the month following the quarter. The separate March quarter review is dropped; instead, an annual review for the year ending March must be submitted to the Board by June 30 and preserved for RBI inspection.
What it means for you
Banks must tighten their quarterly fraud reporting cycles to ensure Audit Committee review within one month of quarter-end for non-March quarters. The annual review consolidates the March period, reducing reporting burden but requiring robust record-keeping for RBI examiners. This shift aims to streamline oversight while maintaining accountability.
What you must do
- Update internal fraud reporting calendars to align quarterly reviews for June, September, December with Audit Committee meetings in the following month.
- Eliminate separate March quarter review; instead, prepare an annual fraud review for the year ending March and present it to the Board by June 30.
- Ensure annual review documents are preserved for RBI inspection, as they no longer need to be sent to RBI.
- Communicate these changes to audit, compliance, and fraud monitoring teams to avoid non-compliance.
Who it affects
Scheduled Commercial Banks (excluding RRBs), All India Financial Institutions, Audit Committees of the Board, Board of Directors, Fraud monitoring and compliance teams
What is the new deadline for quarterly fraud reviews?
For quarters ending June, September, and December, the fraud review must be placed before the Audit Committee in the month immediately following the quarter.
Do we still need to send the annual fraud review to RBI?
No, the annual review for the year ending March should be presented to the Board by June 30 and preserved for RBI inspection, but not sent to RBI.