Audit of loans over Rs. 50 crores : PSBs

A fresh directive from the Finance Ministry, public sector banks have started conducting forensic audits on all loan accounts above Rs 50 crore for any possible fraud, industry sources told The Indian Express.

The Public Sector Banks shall initiate forensic audit of all loan accounts above Rs 50 crores to detect any possible fraud, following the instructions of the Ministry of Finance. The Banks shall then highlight potential NPAs to Government and investigative agencies, for further action.

“We are undertaking this challenging task of auditing all accounts above Rs 50 crore. These are forensic audits being done in line with the Government’s initiative to detect frauds. For any account that is turning into NPA, we are seeking a borrower status report from the Central Economic Intelligence Bureau. This will help us identify whether the NPA is due to genuine business issues or some fraudulent activity,” said a top official with a public sector bank , on the condition of anonymity.

Forensic Audit examines a company/individual’s financial information, detects fraud, willful default, fund diversion and misreporting of accounts. The collected evidence can be used s court evidence.