All deposit taking NBFCs
(including RNBCs)
Dear Sirs,
Frauds –
Future approach towards monitoring of frauds in NBFCs
Please
refer to Company Circular No. 106 dated September 04, 2007 on the captioned subject
which has now been revised as under:
Para 2.2- Cases
of ‘negligence and cash shortages’ and ‘irregularities in foreign exchange transactions’
referred to in items (d) and (f) above are to be reported as fraud if the intention
to cheat / defraud is suspected / proved. However, the following cases where fraudulent
intention is not suspected / proved at the time of detection, will be treated
as fraud and reported accordingly:
a. cases of cash shortages
more than Rs.10,000/- and
b. cases of cash shortages more than Rs. 5000/- if
detected by management /auditor / inspecting officer and not reported on the occurrence
by the persons handling cash.
2. These instructions
are being issued in exercise of powers vested in the Bank under Section 45K and
45L of the RBI Act, 1934.
3. A copy of the updated guidelines
is enclosed
for meticulous compliance.
Yours faithfully
(P.
Krishnamurthy)
Chief General Manager In-Charge