Executive Summary:
This circular from the RBI announces changes in the monitoring and reporting mechanism for fraud cases in Urban Cooperative Banks (UCBs). It specifies revised procedures for reporting frauds based on the amount involved, with different reporting channels for frauds below ₹1.00 crore and those of ₹1.00 crore and above. The changes are effective from May 19, 2016.
Key Points / Main Content:
* **Monitoring of Frauds:**
* Frauds below ₹1.00 crore will be monitored by the respective Regional Office of DCBS, RBI.
* Frauds of ₹1.00 crore and above will be monitored by CFMC, RBI, Bengaluru.
* **Reporting of Frauds by UCBs:**
* Frauds below ₹1.00 lakh are not to be reported individually, but statistical data should be submitted quarterly.
* Individual frauds of ₹1.00 lakh and above but below ₹1.00 crore should be reported to the Regional Office of DCBS, RBI, in FMR1 format, within three weeks of detection.
* Individual frauds of ₹1.00 crore and above should be reported to CFMC, DBS, RBI, Bengaluru, in FMR1 format, within three weeks of detection, with a copy to the Regional Office of DCBS, RBI.
* For frauds of ₹1.00 crore and above, a flash report (DO letter) must be submitted to Principal Chief General Manager, DBS, CO, RBI within one week of the fraud coming to the bank's Head Office notice, with a copy to the Regional Office of DCBS, RBI.
* **Submission of Reports:**
* FMR1 reports should be submitted as soft copies via email.
* UCBs must submit a monthly certificate to CFMC, Bengaluru, with a copy to the respective Regional Office of DCBS, RBI, within seven days from the end of the month, confirming that soft copies of all fraud cases of ₹1.00 lakh and above have been sent via email.
Impact Analysis:
Urban Cooperative Banks (UCBs):
* Impact: UCBs must adhere to the revised fraud monitoring and reporting mechanism, which includes new reporting channels and timelines based on the fraud amount.
* Action Required: UCBs must report frauds as per the revised guidelines, submit FMR1 reports via email, and provide a monthly certificate confirming the submission of fraud cases.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank of India, responsible for regulating the banking sector and monetary policy.
Primary Urban Cooperative Banks (UCBs): A type of cooperative bank in India that primarily serves urban and semi-urban areas.
Master Circular DCBR.CO.BPD.MC.No.112.05.001/2015-16: RBI's Master Circular on Frauds Classification and Reporting dated July 01, 2015, which provides guidelines for UCBs on classifying and reporting fraud.
Regional Office of Department of Cooperative Bank Supervision (DCBS): A regional branch of the RBI's Department of Cooperative Bank Supervision, responsible for supervising UCBs within its jurisdiction.
Central Fraud Monitoring Cell (CFMC): A specialized unit within the RBI responsible for monitoring and analyzing significant fraud cases reported by banks.
Bengaluru, Karnataka: The location of the Central Fraud Monitoring Cell (CFMC) within the Department of Banking Supervision (DBS) of RBI.
FMR1 format: The prescribed format for reporting individual fraud cases to the RBI.
Department of Banking Supervision (DBS): A department of RBI. Frauds of 1.00 crore and above should be reported to Central Frauds Monitoring Cell CFMC, Department of Banking Supervision DBS
RBI/2015-16/399
DCBS.CO.Cir.No.001/12.17.001/2015-16 May 19, 2016
The Chief Executive Officer
All Primary (Urban) Co-operative Banks
Dear Sir / Madam,
Frauds in UCBs: Changes in Monitoring and Reporting mechanism
Please refer to our Master circular no. DCBR.CO.BPD.MC.No.1/12.05.001/2015-16 on
Frauds- Classification and Reporting dated July 01, 2015.
2. On a review, it has been decided to change the fraud monitoring and reporting
mechanism at the Regional Offices and Central Fraud Monitoring Cell (CFMC) of the RBI.
Accordingly, henceforth:
(i) Frauds below ₹ 1.00 crore will be monitored by the respective Regional Office of the
Department of Co-operative Bank Supervision (DCBS), RBI under whose jurisdiction
the Head Office of the bank falls and
(ii) Frauds of ₹ 1.00 crore and above will be monitored by CFMC, RBI, Bengaluru.
3. Reporting of frauds by UCBs:
Consequently, the reporting mechanism for fraud cases will be as under:
3.1 Frauds below ₹ 1.00 lakh are not to be reported individually to the RBI. However, as
done earlier, statistical data in respect of such frauds should be submitted to RBI in the
prescribed quarterly statement.
3.2 Individual frauds of ₹ 1.00 lakh and above but below ₹ 1.00 crore should be reported to
the Regional Office of Department of Cooperative Bank Supervision (DCBS) of RBI, under
whose jurisdiction the Head Office of the bank falls, in FMR-1 format, within three weeks
from the date of detection.
सहकार� बक� पयवर् े�ण �वभाग, क�द्र�य कायार्लय, बांन्द्रा कुलार् कॉम्पेक्स, बांन्द्रा (पु), मुंबई - 400051 भारत
फोन: 022 – 26578100/8300/8700 ; फैक्स: 022 - 26571117 ; ई-मेल: cgmdcbsco@rbi.org.in
Department of Co-operative Bank Supervision, Central Office, C-9, Gr/ 1st floor, Bandra Kurla Complex, Bandra (E),
Mumbai - 400051, India
Phone: 022 – 26578100; Fax 022-26571117 E-mail: cgmdcbsco@rbi.org.in
�हदं � आसान है, इसका प्रयोग बढ़ाइए—
चेतावनी: भारतीय �रज़व र् बक� द्वारा ई-मेल, डाक, एसएमएस या फोन कॉल के ज�रए �कसी क� भी व्यिक्त क� जानकार� जैसे बक� के खात े का ब्यौरा, पासवड र् आ�द
नह�ं मांगी जाती है। यह धन रखने या देने का प्रस्ताव भी नह� ं करता है। ऐसे प्रस्ताव� का �कसी भी तर�के से जवाब मत द�िजए।
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords, etc.It never keeps or offers
funds to anyone. Please do not respond in any manner to such offers.3.3 Individual frauds of ₹ 1.00 crore and above should be reported to Central Frauds
Monitoring Cell (CFMC), Department of Banking Supervision (DBS), RBI, Bengaluru, in
FMR-1 format, within three weeks from the date of detection with a copy to Regional Office
of DCBS, RBI under whose jurisdiction the Head Office of the bank falls.
3.4 Additionally, in case of frauds of ` 1.00 crore and above, a flash report in the form of DO
letter addressed to Principal Chief General Manager, DBS, CO, RBI has to be submitted
within a week of such fraud coming to the notice of the bank's Head Office with a copy to
Regional Office of DCBS, RBI under whose jurisdiction the Head Office of the bank falls.
4. Further, you may be aware about the discontinuance of submission of hard copy of non-
statutory returns. It is reiterated that FMR-1 should be submitted in soft copies through e-
mail as per reporting mechanism advised in para 3.2 and 3.3 above. However, UCBs have
to submit a monthly certificate to the effect that soft copy of all the frauds of ₹ 1.00 lakh and
above, to be reported to the RBI in a month, has been sent through email. The certificate
may be sent to CFMC, Bengaluru with a copy to the respective Regional Office of DCBS,
RBI under whose jurisdiction the Head Office of the bank falls within seven days from the
end of the month. A format of the same is given in Annex-1.
5. The above changes will be effective from the date of this circular. All other instructions
contained in the Master Circular on Frauds–Classification and Reporting dated July 01, 2015
remain unchanged.
Yours faithfully
(Malvika Sinha)
Principal Chief General Manager
सहकार� बक� पयवर् े�ण �वभाग, क�द्र�य कायार्लय, बांन्द्रा कुलार् कॉम्पेक्स, बांन्द्रा (पु), मुंबई - 400051 भारत
फोन: 022 – 26578100/8300/8700 ; फैक्स: 022 - 26571117 ; ई-मेल: cgmdcbsco@rbi.org.in
Department of Co-operative Bank Supervision, Central Office, C-9, Gr/ 1st floor, Bandra Kurla Complex, Bandra (E),
Mumbai - 400051, India
Phone: 022 – 26578100; Fax 022-26571117 E-mail: cgmdcbsco@rbi.org.in
�हदं � आसान है, इसका प्रयोग बढ़ाइए—
चेतावनी: भारतीय �रज़व र् बक� द्वारा ई-मेल, डाक, एसएमएस या फोन कॉल के ज�रए �कसी क� भी व्यिक्त क� जानकार� जैसे बक� के खात े का ब्यौरा, पासवड र् आ�द
नह�ं मांगी जाती है। यह धन रखने या देने का प्रस्ताव भी नह� ं करता है। ऐसे प्रस्ताव� का �कसी भी तर�के से जवाब मत द�िजए।
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details, passwords, etc.It never keeps or offers
funds to anyone. Please do not respond in any manner to such offers.Annex-1
Monthly certificate in respect of submission of fraud cases through FMR-1
Name of the bank: Date:
Certificate for the month:
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.
Sr. Fraud Number Name of the Party Amount Involved (₹ lakh) Date
No. sent
Signature
Name & Designation of the authorized official