RBI/2015-16/295
DBS.CO.CFMC.BC.No.007/23.04.001/2015-16

January 21, 2016

The Chairmen / Chief Executive Officers
All Scheduled Commercial Banks (excluding RRBs) /
Local Area Banks / select Financial Institutions

Dear Sir / Madam

Fraud Reporting and Monitoring

1. Operationalisation of Central Fraud Registry

1.1 As you are aware, Governor had announced in his Fourth Bi-monthly Monetary Policy Statement, 2014-15 under para 22 as under:

“Along with early detection mechanisms for frauds, a Central Fraud Registry is also proposed to be created simultaneously as a searchable centralised database for use by banks.”

1.2 Accordingly, a Central Fraud Registry (CFR) has been operationalised with effect from January 20, 2016. Operational instructions on its use have since been issued to banks.

2. Revision of limits in reporting of Fraud Cases

2.1 Recently a review of the fraud reporting mechanism to the Regional Offices/Central Fraud Monitoring Cell (CFMC) of the RBI was undertaken and it has been decided to effect some changes in the same. Accordingly henceforth,

1. Frauds of ₹ 0.1 million and above but below ₹ 50 million will be monitored by the respective Regional Office of RBI under whose jurisdiction the Head Office of the bank falls / Senior Supervisory Manager (SSM) of the bank. Frauds of ₹ 50 million and above will be monitored by CFMC, Bengaluru, and

2. Flash reports are to be sent in fraud cases of ₹ 50 million and above to the CGM-i-C, DBS, CO with a copy to CFMC at Bengaluru as against the present limit of ₹ 10 million and above.

2.2. Further, it has also been decided that henceforth banks/FIs need not send the hard copies of the FMR-1 returns. Instead a monthly certificate should be submitted to the effect that soft copy of all the frauds of ₹ 0.1 million and above, to be reported to the RBI in a month, has been sent to email. The certificate should contain serially the fraud number, name of the party, amount involved and the date of sending the soft copy to RBI. The certificate may be sent to CFMC, Bengaluru with a copy to the respective Regional Office of RBI under whose jurisdiction the Head Office of the bank falls /SSM of the bank, within seven days from the end of the month. A format of the same is given in Annex-1.

2.3. The above changes will come into effect immediately. Amendments to the Master Circular on Frauds – Classification and Reporting have been made (relevant changes are given in Annex-2) and the revised Master Circular will be uploaded on the Bank’s website shortly.

2.4. All other instructions contained in the above Master Circular dated 1st July 2015 remain unchanged.

Yours faithfully

(Manoj Sharma)
Chief General Manager

Annex-1

Monthly certificate in respect of submission of fraud cases through FMR-1

Name of the bank:
Certificate for the month:

Date:

It is certified that soft copy of the following fraud cases, which were to be reported to RBI during the month ------------------------, have been sent to RBI by mail.

Signature
Name & Designation of the authorized official

Annex-2

Changes effected in the Master Circular on Frauds-Classification and Reporting

(changes in the table given in para 3.1 of the Master Circular)

Changes are effected in the relevant cells with the remarks “Existing” and “Revised”