CVC has changed investigation procedure to help CBI and ED work together to stop bank fraud.
In a move to curb high value bank frauds, like the one involving former liquor baron Vijay Mallya, the Central Vigilance Commission today made important changes in the procedure for investigating such cases.
The Vigilance Commission has ordered the CBI to share all details on big ticket frauds with the Enforcement Directorate at the investigation stage itself, consequently simplifying prosecution of the accused in the case.
Only the Enforcement Directorate can apply provisions of the stringent Anti-Money Laundering Act to quickly prosecute corporate fraudsters. The decision of the CVC comes at a time when there have been several cases of corporate fraud involving crores of rupees.
Under the previous procedure, the CBI often involved the Enforcement Directorate at a later stage of their investigation. The delay sometimes resulted in loss of crucial leads to help trace money laundered by corporate fraudsters. After new directions from the Vigilance Commission, the Enforcement Directorate will have access to all details at the preliminary stage of investigations into corporate and bank frauds.
In a related development, the CBI has also been made the nodal authority for public sector banks to report frauds of over Rs 50 crore. A Join Director level officer has been authorised in the CBI to directly receive complaints of fraud from the banks. After receiving such reports, the officer will recommend investigation by any of the agency's specialist wings such as the Anti-Corruption Department, Economic Offences Wing or Bank Security and Fraud Cell.
Chief Vigilance Officers, who act as agents of the Central Vigilance Commission to check corruption in public sector banks have been empowered to coordinate with the CBI and report such cases.
A total of 171 bank fraud cases involving funds of over Rs 20,000 crore were probed by the CBI last year. Investigations into the Rs 9000 crore bank fraud carried out by Vijay Mallya are being conducted by both the CBI and the Enforcement Directorate.