What changed
This master circular updates and consolidates all prior instructions on fraud classification and reporting for primary urban co-operative banks up to June 30, 2013. It replaces the previous master circular dated July 2, 2012. The key requirements and timelines remain consistent with earlier guidelines.
What it means for you
Urban co-operative banks must ensure strict adherence to fraud reporting timelines to avoid penal action under Section 47(A) of the Banking Regulation Act, 1949. Delays in reporting can lead to similar frauds elsewhere, as caution advices are delayed. Banks need to fix staff accountability for reporting delays and nominate a senior official for all fraud-related returns.
What you must do
- Nominate a senior official responsible for submitting all fraud-related returns to RBI.
- Report frauds within prescribed timelines based on amount thresholds: below Rs. 1 lakh, Rs. 1 lakh to less than Rs. 25 lakh, and Rs. 25 lakh and above.
- Ensure fraud reports include full information and are submitted without delay to avoid penal action.
- Fix staff accountability for delays in reporting fraud cases to RBI.
- Submit quarterly returns on frauds outstanding and progress reports as per formats FMR-1 to FMR-4.
Who it affects
All Primary (Urban) Co-operative Banks, Chief Executive Officers of Urban Co-op Banks, Senior officials nominated for fraud reporting
What are the fraud amount thresholds for reporting to RBI?
Frauds involving amounts less than Rs. 1 lakh, Rs. 1 lakh and above but less than Rs. 25 lakh, and Rs. 25 lakh and above each have specific reporting timelines and procedures as detailed in the circular.
What happens if a bank delays reporting a fraud?
Delays in reporting can result in penal action under Section 47(A) of the Banking Regulation Act, 1949 (as applicable to co-operative societies). Banks must also fix staff accountability for such delays.
Who is responsible for submitting fraud returns?
Banks must nominate a senior official who will be responsible for submitting all fraud-related returns, including quarterly reports and progress reports.