RBI directed banks to Periodically Audit Documents of Credits of 5 Crore and Above
RBI on 7 June 2013 directed the banks to audit and verify the documents of all credits of 5 crore and above periodically to prevent frauds.
Reserve Bank of India (RBI) on 7 June 2013 directed the banks to periodically audit and re-verify the documents of all credits of and above 5 crore rupees, till the loan is completely repaid. The directions came in order to control frauds.
RBI issued this notification in Mumbai and said that the banks should provide quarterly review notes of such audits that include information like number of accounts where rectification is required, list of deficiencies observed by auditors and steps taken to rectify the deficiencies. It also asked about the action taken on issues of pending accounts from earlier quarters.
The direction came up after RBI studied a large value of frauds at the time when the branches of banks were under concurrent audit. As it identified that number of frauds were perpetrated on account of the submission of forged documents of the borrower, which were certified by advocates/chartered accountants/valuers.