Tuesday, March 15, 2016

Forensic audit must for all bad loans, Parliament Panel to RBI

Cautioning that the rising trend of non performing assets (NPAs) with banks has the potential to damage the growth story, the Finance Standing Committee of Parliament has called for immediate
forensic audit of all restructured loans that had turned into bad debts. Forensic audit is also required for wilful defaults and Reserve Bank of India (India) has been asked to prepare guidelines for the process. The analytical reports of the forensic audit should be submitted to the panel in six months, it said in its report.

RBI Rapped

RBI, as a regulator, did not succeed in implementing its own guidelines, it said, and asked the apex bank to be proactive and monitor the issue on a regular basis.

Empowering Banks

On strategic debt restructuring, the report said it could empower banks to take control of the
defaulting entity, and recommended that a change in management must be made mandatory in cases

involving wilful default.

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