RBI Set up YH Malegam Committee to Monitor Bad Loans

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PNB Bank Fraud has stunned the common man as well as the bank regulatory organisation Reserve Bank of India. Stunned by the 11,400 crore fraud, RBI has formed a committee under the chairmanship of Y H Malegam.

The committee will look into reasons for high divergence observed in asset classification and provisioning by banks vis-à-vis RBI’s supervisory assessment. It will suggest steps needed to prevent it, factors leading to increasing incidence of frauds in banks and measures (including IT interventions) needed to curb and prevent it.

Malegam who served as the Central Board of Directors of RBI will enquire about the issue associated with the classification of bad loan, rising incidents of frauds and potency of the audits.

RBI has privately warned the bank of possible misuse and asked them to implement the precautionary methods about the potential malicious use of SWIFT infrastructure. 

Members of the committee : 

Bharat Doshi , S Raman , Nandkumar Saravade , A K Misra

The committee was set up in wake up of Rs 11,400 crore SWIFT (Society for Worldwide Interbank Financial Telecommunication)-related fraud in National Bank (PNB) and RBI’s drive  of strengthening supervisory framework in the country to avoid frauds.