Raghuram Rajan reveals RBI had submitted a list of high-profile frauds to PMO

The Reserve Bank of India (RBI) had submitted a list of high profile banking fraud cases to Prime Minister's Office (PMO) for a coordinated action, said former RBI governor Raghuram Rajan in a note to a Parliamentary panel.

"The RBI set up a fraud monitoring cell when I was Governor to coordinate the early reporting of fraud cases to the investigative agencies. I also sent a list of high profile cases to the PMO urging that we coordinate action to bring at least one or two to book. I am not aware of progress on this front," Rajan said in the note to Chairman of Estimates Committee Murli Manohar Joshi.

Also Read | Rupee crashes to new low of 72.91, likely to touch 80 against US dollar

The revelation of Rajan has come amid the raging debate over the increasing non-performing assets (NPAs) and detection of multiple frauds in the state-run banks.

The disclosure is also significant amid the blame game between the Congress and BJP over the Rs 13,000 crore PNB scam. The Congress party had claimed that PMO was alerted about the Nirav Modi scam but no action was taken against him.

Rajan, who was the RBI governor for three years till September 2016, said that the system has been ineffective in bringing even a single high-profile fraudster to book and said that frauds are different from normal non-performing assets (NPAs).

Also Read | Investors become poorer by over Rs 4 lakh crore in two days of market crash

“The investigative agencies blame the banks for labelling frauds much after the fraud has actually taken place, the bankers are slow because they know that once they call a transaction a fraud, they will be subject to harassment by the investigative agencies, without substantial progress in catching the crooks,” he said.