c

CAB CALLING | April - June, 2009

Gist of Important RBI Circulars

RPCD Circulars
Acknowledgement of Nomination
Banks are advised to strictly comply with the provisions of Banking Regulation Act, 1949 (AACS) and Co-operative Banks (Nomination) Rules, 1985 / Banking Companies (Nomination) Rules, 1985 and devise a proper system of acknowledging the receipt of the duly completed form of nomination, cancellation and / or variation of the nomination. Such acknowledgement should be given to all customers irrespective of whether the same is demanded by the customers or not. When a bank account holder has availed himself / herself of nomination facility, the same may be indicated on the passbook so that, in case of death of the account holder, the relatives can know from the pass book that the nomination facility has been availed of by the deceased depositor and take suitable action. In addition, banks are also advised to indicate the name of the Nominee in the Pass Books / Statement of Accounts / FDRs, in case the customer is agreeable to the same, as this would be helpful to the customers/ nominees. (RPCD.CO.RF.BC.No.96/07.38.01/2008-09 dated April 13, 2009); (RPCD.CO. RRB. BC.No.103/03.05.28-A/2008-09 dated May 13, 2009)

Levy of Service Charges for Electronic Payment Products and Outstation Cheque Collection
Banks are advised to follow the framework of charges to be levied by banks for various electronic payment products (RTGS / NEFT / ECS) as prescribed vide DPSS circular dated October 8, 2008. These charges are also applicable to all inter-bank transfers using the electronic mode. It is clarified that these charges are applicable for transfer of surplus clearing funds under Remittance Facilities Scheme (RFS), 2007 also. (RPCD.CO.RF.BC.No. 95 / 07.06.00 / 2008-09 dated April 13, 2009); (RPCD.CO. RRB. BC.No.105 /03.05.33 /2008-09 dated May 15, 2009)

Need for Bank Branches / ATMs to be Made Accessible to Persons with Disabilities
Banks are advised to take necessary steps to provide all existing ATMs / future ATMs with ramps so that wheel chair users / persons with disabilities can easily access them and also make arrangements in such a way that the height of the ATM does not create an impediment in its use by a wheelchair user. Regional Rural Banks may also take appropriate steps including providing ramps at the entrance of the bank branches so that the persons with disabilities / wheel chair users can enter the bank branches and conduct business without much difficulty. RRBs should make at least one third of new ATMs installed as talking ATMs with Braille keypads and place them strategically in consultation with other banks to ensure that at least one talking ATM with Braille keypad is generally available in each locality for catering to needs of visually impaired persons. RRBs may also bring the locations of such talking ATMs to the notice of their visually impaired customers. (RPCD.CO.RRB.BC.No.97/03.05.90-A/2008-09 dated April 21, 2009); (UBD.CO. BPD. (PCB) Cir. No. 63/9.39.000/2008-09 dated April 29, 2009); (DBOD.No.Leg.BC.123 /09.07.005/2008-09 dated April 13, 2009)

Security Arrangement in Bank Branches

A check list of guidelines for security arrangements for implementation with a view to improving the security arrangements in

88

CAB CALLING | April - June, 2009

bank branches and the morale of staff including security personnel has been prepared. Banks may arrange to obtain copies of the Report titled Report of the Working Group to review Security Arrangements in Banks July 2004 from IBA and supply to each branch for their guidance and reference for security arrangements. (For the checklist, please refer to the original circular). (RPCD.CO.RRB.BC.No.98 /03.05.28 /2008-09 dated April 21, 2009)

Submission of Certified Copies of Entries / Print out to Courts

State and Central Co-operative banks are advised to comply with the provisions of the Bankers Books Evidence Act, 1891 while furnishing certified copies and computer printouts to courts. In the absence of such statutory certificate, the court would not be obliged to admit the document in evidence without any further proof. (RPCD.CO.RF.BC.No. 100 /07.38.03/2008-09 dated April 24, 2009); (RPCD.CO. RRB. BC.No.110 /03.05.33/2008-09 dated May 29, 2009)

Credit Delivery to the Micro and Small Enterprises Sector

Banks are advised to consider, for speedy implementation, the recommendations made by the Working Group for rehabilitation of potentially viable sick units in MSME sector as set out in Annex III with regard to timely and adequate flow of credit to the MSE sector. Banks are advised to apply the Reserve Banks guidelines on debt restructuring optimally and in letter and spirit. Banks are also advised to put in place a suitable OTS for this sector. Banks may undertake a review and put in place the following policies for the MSE sector, duly approved by the Board of Directors, (i) loan policy governing extension of credit facilities, (ii) restructuring/Rehabilitation policy for revival of potentially viable sick units/enterprises, and (iii) non-discretionary One Time Settlement scheme for recovery of non-performing loans. (For complete details, please refer to the original circular). (RPCD. SME&NFS. BC.No.102/06.04.01/2008-09 dated May 4, 2009); (UBD.BPD.No. 71/09.09.001/2008-09 dated June 16, 2009)

Controlling Office Renamed as Regional Office - RRBs

The words Controlling Office referred to in paragraph 2 and 2.3 of our Master Circular on Branch Licensing - RRBs dated July 1, 2008 may be replaced by the words Regional Office. Controlling Office, for all purposes, includes Area Office. (RPCD.CO.RRB.BC. No.101 /03.05.90-A /2008-09 dated June 18, 2009) dated May 4, 2009); (RPCD.CO. RRB.BC No. 114/03.05.90-A/2008-09

Investment Portfolio of Banks Transactions in Securities

Banks may shift investments to / from permanent category with the approval of their Board of Directors only once a year. Such shifting may normally be allowed at the beginning of the accounting year. No further shifting to / from permanent category will be allowed during the remaining part of that accounting year. (RPCD.CO.RF.BC.No. 104 /07.37.02/2008-09 dated May 7, 2009)

Unclaimed Deposits and Inoperative / Dormant Accounts in Banks

RRBs are to follow the instructions detailed in the circular while dealing with inoperative / dormant accounts. (For details of instructions, please refer to the original circular) (RPCD.CO.RRB.BC.No.108 /03.05.33/2008-09 dated May 22, 2009)

Exposure to Commercial Real Estate

89

CAB CALLING | April - June, 2009

State and Central Cooperative Banks should desist from financing the commercial real estate sector. As regards the credit facilities already extended to this sector, it should be ensured that such exposures are well secured and adequate provisioning made, wherever required, as per the existing prudential guidelines. It may also be ensured that the credit facilities are not renewed. (RPCD.CO.RF.BC.No. 109 /07.38.01/2008-09 dated May 25, 2009)

Sub-Committee of SLBC for Export Promotion

All commercial banks were advised to set up a separate Sub-Committee under State Level Bankers Committee (SLBC) to discuss exporters problems in relation to export finance and other bank related issues at the State level. It is observed that subcommittees are either not been formed at certain States or meetings are not held regularly as per the existing guidelines. SLBC Convenor banks are advised to set up the Sub-Committee, if not done already and hold meetings at prescribed intervals for the captioned purpose. (RPCD.LBS.CO.BC.No 111 /02.13.03/2008-09dated June 02, 2009)

Valuation of Properties - Empanelment of Valuers

There is a need for putting in place a system / procedure for realistic valuation of fixed assets and also for empanelment of valuers for the purpose. Banks may be guided by the aspects mentioned in the circular while formulating a policy on valuation of properties and appointment of valuers. (For details, please refer to the original circular). (RPCD.CO.RF.BC.No. 112 /07.37.02/2008-09 dated June 3, 2009); (RPCD.CO. RRB.BC.No.115/03.05.33/2008-09 dated June 22, 2009)

Income Recognition, Asset Classification, and Provisioning

It has been decided to extend the concession of treating only that particular facility which becomes irregular is treated as NPA to all other credit societies under on-lending system in addition to Primary Agricultural Credit Societies. However, in respect of all direct loans and advances granted to a borrower, all such loans will become NPA even if one loan account becomes NPA, as hitherto. (RPCD.CO.RF.BC.No.113/07.37.02/2008-09 dated June 16, 2009)

UBD Circulars
Prudential Guidelines on Restructuring of Advances by UCBs
It has been decided to amend paragraph 5.2 of the circular dated March 6, 2009 on prudential guidelines on restructuring of advances. (For details, please refer to the original circular). (UBD.PCB.BPD.Cir.No. 60 /13.05.000 / 2008-09 dated April 20, 2009)

Lending Under Consortium Arrangement / Multiple Banking Arrangements

The formats for declaration of information by the borrower at the time of applying for a credit facility to a bank and the format for exchange of information among the banks in respect of borrowers enjoying credit facilities from more than one bank have been revised to reflect information relating to the derivative transactions entered into by banks with the borrowers and the unhedged foreign currency exposures of the borrowers.

90

CAB CALLING | April - June, 2009

(UBD.PCB.No. 59 /13.05.000/2008-09 dated April 9, 2009)

Instruments for Augmenting Capital Funds

It has been decided to partially modify p and Para (B) 2.8.1 (d) & (e) and para 2.8.2 of the guidelines on issue of preference shares issued on July 15, 2008. (For details, please refer to the original circular) (UBD.PCB.Cir.No. 61/09.18.201 / 2008-09 dated April 21, 2009)

Appointment of UCBs as Agents/ Sub-agents Under Money Transfer Service Scheme

It has been decided that the amount of security deposits to be maintained by the agents with the UCBs acting as sub-agents may, henceforth, be decided mutually. However, it should be ensured that the payouts of UCBs pending reimbursement by the agents should not, at any point of time, be higher than the security deposits. UCBs (AD Category I / II) already acting / proposing to act as sub-agent may seek approval of the Regional Office of the RBI concerned by furnishing an undertaking that the amount of payouts at no point of time would exceed the deposits placed by the agents. (UBD.CO.BPD.PCB.Cir.no.62/16.12.000/2008-09 dated April 23, 2009); (UBD.CO. BPD. PCB.Cir.No.69 /16.12.000/2008-09 dated June 15, 2009)

Extension of Area of Operation (AOO)-Liberalisation

RBI will henceforth consider requests for expansion of area of operation to the entire state from licensed Tier II UCBs registered in states that have entered into MoU with Reserve Bank and are classified as Grade I as per the last statutory inspection and / or conforming to the financials of a Grade I bank as per the latest audited reports. While considering such applications, RBI will give due consideration to system of internal controls prevailing in the bank and supervisory comfort. In respect of Tier I UCBs, the existing norms will continue to be applicable. UCBs desirous of extending their area of operation as above may approach the Regional Offices concerned of Reserve Bank for prior approval. (UBD.CO.LS.Cir.No. 66 /07.01.000/2008-09 dated May 6, 2009)

Declaration of Dividend by UCBs

UCBs may declare dividend without prior permission of the Reserve Bank subject to compliance with the following parameters. (i ) Compliance with CRAR norms as prescribed by RBI, (ii) Net NPA are less than 10% after making all necessary provisions as per the assessment made by RBI in its last inspection report, (iii) There is no default in CRR / SLR during the year for which dividend is proposed, (iv) All the required provisions have been made for NPAs, investments and other assets as per the prudential norms prescribed by RBI, (v) Dividend is paid out of the net profit and after making all statutory provisions and adjustment for accumulated losses in full. UCBs complying with all other parameters, except the one at para 3 (ii) above, may approach the concerned Regional Office of the Reserve Bank for permission for dividend declaration. (UBD.CO. BPD. (PCB) Cir. No. 70 /12.05.001/2008-09 dated June 15, 2009)

Prudential Treatment of Different Types of Provisions in Respect of Loan Portfolios

It has been decided to lay down the guidelines in regard to the prudential treatment of different types of provisions like (i) Additional Provisions for NPAs at higher than prescribed rates (ii) Excess Provisions on sale of NPAs and (iii) Provisions for diminution of fair value in respect of loan portfolios. It is clarified that the relative provisions can only be reckoned for the purpose listed thereagainst. (For details, please refer to the original circular) (UBD.PCB.Cir.No. 73 /09.14.000/2008-09 dated June 29, 2009)

91

CAB CALLING | April - June, 2009

DBOD/DBS Circulars
Guidelines for Issuing Preference Shares as Part of Regulatory Capital
Para 1.7 (b) & (c) of Annex I and p, Para 1.8.2 of Annex- II of the circular dated October 29, 2007 on the Guidelines for issuing preference shares as part of regulatory capital has been partially modified. (For details of modifications, please refer to the original circular). (DBOD.No.BP.BC. 120 /21.01.002/2008-2009 dated April 2, 2009)

Prudential Treatment in Respect of Floating Provisions

Please refer to our circular DBOD.No.BP.BC.118 /21.04.048/2008-09 dated March 25, 2009 regarding prudential treatment of different types of provisions in respect of loan portfolios. Banks are encouraged to build floating provisions as a buffer for the possible stress on asset quality later. t has been decided to defer the implementation of para (iv) of the circular dated March 25, 2009 ibid to the year 2009-10. Accordingly, banks will have the choice between either deducting their existing floating provisions from Gross NPAs to arrive at net NPAs or reckoning it as part of Tier II capital subject to the overall ceiling of 1.25% of total Risk Weighted Assets. It may be noted that this choice is limited to the financial year 2008-09 only. (DBOD.No.BP.BC. 122 /21.04.048/2008-09 dated April 9, 2009)

Prudential Guidelines on Restructuring of Advance by Banks

In August 2008, while carrying out a comprehensive review of the prudential norms governing the restructuring of advances so as to align the general prudential framework with that prescribed for CDR Mechanism, it was considered appropriate to modify the framework for computation of diminution in the fair value of the restructured loans to make it fully consistent with the international practices. It was recognized that the interest only methodology was deficient in as much as it was based only on part of the cash flow of the loan. Besides, in some cases where there was substantial elongation in the repayment period, the present value of interest cash flows as per terms of restructuring even exceeded the present value of interest cash flows as per terms of the loan before restructuring, resulting in negative diminution. This observation highlighted the inadequacy of the interest only approach to properly compute the diminution in the fair value of the restructured loans. In view of the above, RBI has not accepted the request that while computing the diminution in fair value of restructured loans, the cash flows representing principal should not be taken into account. It has been decided to modify the formula for computing diminution in the fair value of restructured loan in respect of all accounts which were restructured in terms of circular dated August 27, 2008 and the subsequent circulars issued on the subject. Accordingly, para 4.3.2 of Circular dated August 27, 2008 is amended. No request for changing the same, particularly for reversion to the present formula, will be entertained in future. Further, it is reiterated that the provisions required as above arise due to the action of the banks resulting in change in contractual terms of the loan upon restructuring which are in the nature of financial concessions. These provisions are distinct from the provisions which are linked to the asset classification of the account classified as NPA and reflect the impairment due to deterioration in the credit quality of the loan. Thus, the two types of the provisions are not substitute for each other. It is also re-emphasised that all the modifications effected to the guidelines on restructuring of advances by RBI since December 2008 are aimed at providing an opportunity to banks and borrowers to preserve the economic value of the units and should not be looked at as a means to evergreen the advances. In their published annual Balance Sheets for the year ending March 2009, in addition to the disclosures regarding restructured loans required in terms of paragraph 8 of the circular dated August 27, 2008 referred to above, banks should also disclose the amount and number of accounts in respect of which applications for restructuring are under process, but the restructuring packages have not yet been approved. (DBOD No. BP. BC. 121 /21.04.132/ 2008-09 dated April 9, 2009)

92

CAB CALLING | April - June, 2009

Prudential Guidelines on Restructuring of Advances
Banks are advised that during the pendency of the application for restructuring of the advance, the usual asset classification norms continue to apply. The process of reclassification of an asset should not stop merely because the application is under consideration. However, as an incentive for quick implementation of the package, if the approved package is implemented by the bank as per the following time schedule, the asset classification status may be restored to the position which existed when the reference was made to the CDR Cell in respect of cases covered under the CDR Mechanism or when the restructuring application was received by the bank in non-CDR cases: (i) Within 120 days from the date of approval under the CDR Mechanism and (ii) Within 90 days from the date of receipt of application by the bank in cases other than those restructured under the CDR Mechanism. Certain modifications were made to the provisions of the circular dated August 27, 2008, by circulars dated January 2, 2009 and February 4, 2009. The circulars dated December 8, 2008, January 2, 2009 and February 4, 2009 will cease to operate from July 1, 2009. Thereafter, restructuring of all accounts will be governed only by the provisions of circulars dated August 27, 2008, November 3, 2008 and April 9, 2009. In addition to the disclosures required in terms of our circular dated August 27, 2008, banks may also disclose the information in the balance sheet as detailed in Annex. (Please refer to the original circular for full details on restructuring and disclosure requirements) (DBOD.No.BP.BC.No.124/21.04.132/2008-09 dated April 17, 2009)

Prudential Norms on Unsecured Advances

Banks are advised that (a) for determining the amount of unsecured advances for reflecting in schedule 9 of the published balance sheet, the rights, licenses, authorisations, etc., charged to the banks as collateral in respect of projects (including infrastructure projects) financed by them, should not be reckoned as tangible security. Hence such advances shall be reckoned as unsecured, and (b) banks should also disclose the total amount of advances for which intangible securities such as charge over the rights, licenses, authority, etc. has been taken as also the estimated value of such intangible collateral. The disclosure may be made under a separate head in Notes to Accounts. This would differentiate such loans from other entirely unsecured loans. (DBOD.No.BP.BC. 125 /21.04.048/2008-09 dated April 17, 2009)

Extension of Guarantee - Maturity Beyond Ten years

Banks to allowed issue guarantees for periods beyond 10 years. However, while issuing such guarantees, banks are advised to take into account the impact of very long duration guarantees on their Asset Liability Management. Further, banks may evolve a policy on issuance of guarantees beyond 10 years as considered appropriate with the approval of their Board of Directors. (DBOD.No. BP. BC.127/ 21.04.009/2008-09 dated April 22, 2009)

Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by Banks
Banks are now further advised to submit an Annual Compliance Certificate giving the particulars of outsourcing contracts, the prescribed periodicity of audit by internal / external auditor, major findings of the audit and action taken through Board, to the Reserve Bank of India. (DBS.CO.PPD.BC. 5 /11.01.005/2008-09 dated April 22, 2009)

Payment of Interest on Savings Bank Account on a Daily Product Basis

It is proposed that payment of interest on savings bank accounts by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010. In order to ensure a smooth transition, banks may work out the modalities in this regard.

93

CAB CALLING | April - June, 2009

(DBOD. No. Dir. BC.128/13.03.00/2008-09 dated April 24, 2009)

Use of Business Facilitators (BFs) and Business Correspondents (BCs)

It has been decided to increase the maximum distance criteria (distance between the place of business of a BC and the base branch) for the operation of a Business Correspondent (BC) for rural, semi-urban and urban areas from the existing 15 kms. to 30 kms. (DBOD.No.BL.BC.129 /22.01.009/2008-2009 dated April 24, 2009 )

Capital Adequacy Norms for Banks Exposures to Central Counterparties(CCPs)

The revised norms for capital adequacy treatment of banks various types of credit risk exposures to the CCPs will be as under. (i) The exposures to CCPs on account of derivatives trading and securities financing transactions ( e.g. CBLOs, Repos) outstanding against them, will be assigned zero exposure value for counterparty credit risk, as it is presumed that the CCPs exposures to their counterparties are fully collateralised on a daily basis, thereby providing protection for the CCPs credit risk exposures; (ii) The deposits/collaterals kept by banks with the CCPs will attract risk weights appropriate to the nature of the CCP. In the case of CCIL, the risk weight will be 20 per cent and for other CCPs, it will be according to the ratings assigned to these entities as per the New Capital Adequacy Framework. The above prescriptions about the adequacy of margin, quality of collateral and risk management systems of the clearing house/CCP will be reviewed after one year. All existing exposure limits, such as gap limits for forex exposures, PV01 limits for interest rate risk exposures which are applicable for OTC derivatives exposures of banks will continue to apply for exchange traded transactions as well. (DBOD.BP.BC. No.134/21.06.001/2008-09 dated May 26, 2009)

Issue of Guarantees by Banks

Guarantees by the banking system for a corporate bond or any debt instrument not only have significant systemic implications but also impede the development of a genuine corporate debt market and as such banks are advised to strictly comply with the extant regulations and in particular, not to provide guarantees or equivalent commitments for issuance of bonds or debt instruments of any kind. (DBOD.No.DIR.BC.136/13.03.00/2008-09 dated May 29, 2009)

Agricultural Debt Waiver and Debt Relief Scheme, 2008

The Government of India has now decided to make the accounts of other farmers eligible for a debt relief of 25% from Government of India, even if they pay their entire share of 75% as one single instalment, provided the same is deposited by such farmers till June 30, 2009. The banks will not charge any interest on the eligible amount till June 30, 2009. The Government of India has also advised that the banks/lending institutions are allowed to receive even less than 75% of the eligible amount under OTS provided the banks/lending institutions bear the difference themselves and do not claim the same either from the Government or from the farmer. The Government will pay only 25% of the actual eligible amount under debt relief. (DBOD.No.BP.BC.140 /21.04.048/2008-09 dated June 25, 2009)

Closure of Fraud Cases - Relaxation in the Existing Norms

It has been decided that banks would be allowed, for limited statistical / reporting purposes, to close those fraud cases involving amounts upto Rs.25.00 lakh, where (i) the investigation is on or challan / charge sheet not filed in the Court for more than three years from the date of filing of First Information Report (FIR) by the CBI / Police, or (ii) the trial in the courts, after filing of charge sheet / challan by CBI / Police, has not started, or is in progress. However, all such cases will be eligible for closure subject to the fulfilment of other conditions. With regard to the cases now being made eligible for closure, the cases may be closed after

94

CAB CALLING | April - June, 2009

getting the approval of the respective Regional Offices of RBI. The banks should maintain the record of details of such cases in a separate ledger. Even after closure of the fraud cases for limited statistical purposes, banks should vigorously follow up with the investigating agencies (CBI / Police) to ensure that the investigation process is taken to its logical conclusion. Similarly, the banks should continue to ensure that they are regularly and appropriately represented in the court proceedings as and when required. All the relevant records pertaining to such cases must be preserved till the cases are finally disposed of by CBI / Police or Courts, as the case may be. Banks may, with the approval of their respective Boards, frame their own internal policy for closure of such fraud cases, incorporating the above revised norms and other internal procedures / controls as deemed necessary. (DBS. CO. FrMC. BC. No. 7 /23.04.001/2008-09 dated June 05, 2009)

Relaxations in Branch Authorisation Policy - Off Site ATMs

Reserve Bank of India hereby permits Scheduled Commercial Banks to install off-site ATMs at centres/places identified by them, without having the need to take permission from the Reserve Bank in each case. This would, however, be subject to any direction which the Reserve Bank may issue, including for closure/shifting of any such off-site ATMs, wherever so considered necessary by the Reserve Bank. The banks should report full details of the off-site ATMs installed by them in terms of the above general permission to the Regional Offices of RBI concerned immediately after operationalisation and in any case not later than two weeks. Banks may note that the above general permission to open off-site ATMs is being granted to banks subject to the conditions given in Annex III . Further, the various facilities which banks can provide through their off-site ATMs are listed in Annex IV. Banks which have been providing the facility of cash deposit to the customers at their ATMs, should put in place adequate safeguards / procedures (like access through PIN / password etc), so as to ensure identification of depositor in case notes deposited are found to be forged / defective. The details of shifting/closure etc. of off-site ATMs should also continue to be reported to the Regional Offices of RBI concerned immediately after such shifting/closure and in any case not later than two weeks. (DBOD.No. BL.BC. 137 /22.01.001/2008-09 dated June 12, 2009)

Access to Own Credit Report

Banks attention is invited to the provisions of sub section (1) of Section 21 of the Credit Information Companies (Regulation) Act, 2005, which provides any person, who applies for grant or sanction of credit facility, from any credit institution, may request such institution to furnish him a copy of the credit information obtained by such institution from the credit information company. Further, sub-section (2) of the said Section also specifies that every credit institution shall on receipt of request, as indicated in sub-section (1), shall furnish to such person a copy of the credit information subject to payment of charges specified by the Reserve Bank under the Regulations. Reserve Bank, in Credit Information Companies Regulations, 2006, framed under the Act, has already prescribed in Regulation 12(3) a maximum fees of Rs.50/= (Rupees fifty only) for the purpose. Banks and Financial Institutions are, therefore, advised to ensure strict compliance with the provisions of the Credit Information Companies (Regulation) Act, 2005 as well as the rules and regulations framed thereunder. (DBOD.No.DL.BC. 138/20.16.042/2008-09 dated June 24, 2009)

Frauds in Borrowal Accounts Having Multiple Banking Arrangements

Banks which have financed a borrower under multiple banking arrangement should take co-ordinated action, based on commonly agreed strategy, for legal / criminal actions, follow up for recovery, exchange of details on modus operandi, achieving consistency in data / information on frauds reported to Reserve Bank of India, etc. Preferably, the co-ordination efforts should be driven by the bank which detects the fraud first or by the bank which has the maximum exposure, depending on circumstances. It would therefore be necessary for the bank which detects a fraud to immediately share the details with all other banks in the multiple banking arrangement. (DBS CO.FrMC BC No 8 /23.04.001/2008-09 dated June 24, 2009) [ Compiled by S. Thyagarajan, Member of aculty, College of Agricultural Banking, Pune ]

95