OBC, Dena Bank to Undergo Forensic Audit after Rs 436 Crore Scam

The government has initiated a forensic audit at two state-run lenders - Oriental Bank of Commerce and Dena Bank - after unearthing of a suspected scam, wherein the lenders allegedly misappropriated funds worth Rs 436 crore from their fixed deposit customers.

"A forensic audit has already been ordered," Financial Services secretary GS Sandhu told reporters when asked about the alleged scam, adding some suspensions have been initiated by the authorities in this regard.

He, however, was quick to add that it is a case of aberration at the individual officer level and not systemic.

"These are instances which have happened at the lower level, at the branch level because of lack of due diligence or non-adherence to the norms and procedures," Mr Sandhu said.

The lenders are alleged to have indulged in siphoning off the money (Rs 180 crore by OBC and Rs 256 crore by Dena Bank) received as fixed deposits.

"Persons responsible are being taken to task, there have been some suspensions, transfers, and the investigations are on," Mr Sandhu said.

The Finance Ministry official added that the government has also flagged the issue of risk management by state-run banks, saying deputy GM and GM-rank officers will have to undergo a course on risk management before being considered for promotion.

The development comes within a fortnight of the arrest of Syndicate Bank chairman and managing director SK Jain in a corruption case for allegedly receiving Rs 50 lakh from Bhushan Steel and another company for expanding their credit limit.

Newly-appointed Reserve Bank Deputy Governor SS Mundra took serious cognisance of the matter, saying greater sensitisation of the officers about regulations is required.

"There are instances of individual failures but there is a certain process for it. We would certainly look into it. I think the regulations which are available are robust. Why such things happened is because regulations were not followed," he said today.