The Reserve Financial institution of India (RBI) on Tuesday cautioned banks towards having “lakhs of accounts” used for fraudulent transactions and evergreening of mortgage accounts.
“We discovered sure banks having lakhs of such accounts with apparently no legitimate purpose. A few of these accounts had been additionally used as a conduit for sure fraudulent transactions and ever-greening of mortgage accounts. Inside accounts are excessive danger in nature on account of its potential for misuse,” RBI Deputy Governor Swaminathan J mentioned at a Convention of statutory auditors and chief monetary officers of business banks and monetary establishments.
“I’d additionally urge CFOs to put money into know-how and knowledge analytics which might empower them to offer extra correct and real-time monetary insights. This not solely aids in strategic decision-making but additionally enhances the flexibility to reply swiftly to any points recognized throughout audits or supervisory opinions,” he mentioned.
“I due to this fact request the CFOs to have them rationalised utterly, carry them right down to the important minimal and train larger management by periodical reconciliation and a correct reporting to ACB,” Swaminathan mentioned.
The CFOs should shield the integrity of the monetary reporting by guarding towards any misadventure or clever interpretation of laws or accounting requirements, he mentioned. “I’d urge the CFOs to have a watch for element and an sincere and clear communication with the MD & CEO and the remainder of the highest administration. You also needs to preserve alive the channel of escalation to the Chair of the Audit Committee of the Board (ACB), if the next degree of steerage is required in any matter,” he mentioned.
“CFOs to take care of open and sincere communication channels with auditors and financial institution supervisors. It’s crucial to eschew the notion of hiding, withholding, or offering incomplete data to those groups,” Swaminathan mentioned.
“Transparency is essential; by sharing complete and correct knowledge, CFOs not solely facilitate a smoother audit and supervision course of but additionally reinforce the financial institution’s dedication to integrity and compliance. This collaboration builds belief, ensures regulatory adherence, and finally contributes to the monetary stability and status of the establishment,” he mentioned.
Story continues under this advert
“CFOs ought to conduct thorough root trigger analyses of any deficiencies noticed throughout audits or supervisory opinions,” he mentioned. “Somewhat than implementing short-term fixes, understanding and addressing the underlying causes of those points ensures that compliance is sustained over the long run. This method helps stop the recurrence of issues and strengthens the general governance and management setting of the financial institution,” Swaminathan mentioned.
© The Indian Categorical Pvt Ltd