Tough task for CEOs & MD of Public Sector Banks, finance Ministry has given warning to all CEOs of public sector banks (PSBs) either to check all non-performing assets (NPA) accounts exceeding ₹50 crore for fraud or they could face criminal conspiracy charges. This is an extra precaution to keep bankers from getting into legal tangles.
Recently promoter of Bhushan Steel’s Neeraj Singal was arrested by the Serious Fraud Investigation Office (SFIO) for allegedly siphoning off funds from their loan accounts amounting Rs 2000 crore.
Bankers could be held accountable under Section 120B of Indian Penal Code i.e. Punishment of Criminal Conspiracy if they fail to report fraud in an account which is later unearthed by investigating agencies. Further, in case of diversion of funds in those defaulting accounts, bankers may be liable to face criminal proceedings.
What is SFIO ?
In August 2017, SFIO was given powers to arrest people for company law violations. SFIO is a multidisciplinary organisation having experts for prosecution of white-collar crimes and frauds under the company law.
NCLT has so far taken decision on 655 cases under IBC that include more than 200 that have been admitted to various NCLT benches.