Omkar Goswami Committee and Ghosh Committee (Download PDF)

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Omkar Goswami Committee Purpose: Industrial Sickness and Cooperate Restructuring Power to make recommendations: Election Commission shall have the power to make recommendations to the appropriate authority

(a) To refer any matter for investigation to any agency specified by the Commission

(b) Prosecute any person who has committed an electoral offence under this Act

(c) Appoint any special court for the trial of any offence or offences under this Act (RP Act 1951).

Ghosh Committee

Purpose: Bank Frauds

Nature of Recommendation

  • Joint custody and responsibility of cash and other valuables.
  • Transactions in the currency chest reported to RBI on same day.
  • Adhering to the prescribed norms and safeguards issued by RBI in issue and payment of high value drafts, depositing large amounts in new accounts without verifying antecedents, opening of benami accounts etc. to prevent misuse of banking channel.
  • Special security of high value accounts shifted to the bank along with executives and accounts transferred from other branches along with the officials. The observations of RBI inspections promptly and effectively followed up by the banks.
  • Monthly certificate on inspection of associated units and on stocks pledged/hypothecated to bank.
  • Adoption of preventive measures of vigilance in letter and spirit as enumerated.
  • Rotation of staff/duties and transfer covering all categories of staff including dealing room/securities department staff etc.
  • Desk cards for staff to be prepared, banks to designate one of the senior’s officers as a compliance officer.
  • Financial and administrative powers of officials laid down.
  • Precaution in handling cash and valuables - restricted of entry of cash cabin, dual custody of cash/valuables, surprise verification at regular intervals etc.
  • Precaution against theft of cash - staff should not indulge in conversations/answering queries but direct such persons to enquiry counter only.
  • Precaution against shortage in cash reported by cashier. Introduction of surprise checking at frequent intervals.
  • Precaution against misappropriation of cash by members of staff in the guise of customer service. Only authorized personnel should accept cash/issue counterfoils in cash departments. Cashier not allow making entries in passbook.
  • Proper system should evolve in respect of cash balances; insurance and prompt reporting of inter branch and interbank remittances of cash.
  • Banks should evolve proper system of adequate security and custody of cash in dacoit/terrorist attack prone area.
  • Precaution against misusing banking channel for tax evasion. Pos/TCs in excess of Rs 50000/- should be by way of debit to constituent account and not by cash. Doubtful cases reported to higher authorities.
  • Periodical reporting of deposits/withdrawals from currency chests to issue department of RBI.
  • Exercise of caution at the time of opening of new deposit accounts of all types.
  • Customers to be educated about implications of introducing an account without knowing the party.
  • Close watch on the operations in the new accounts should kept.
  • Issue of fresh chequebooks should be only against requisition slip from previous chequebooks and other precautions taken in respect of chequebooks.
  • Precautions in payment of cheque - verification of signature, custody of specimen signatures, custody and control of blank chequebooks etc.
  • Balancing of ledgers periodically by staff other than ledger keepers, scrutiny of unauthorised corrections/corrections and other precautions in respect of ledgers.
  • In operative accounts to be kept in separate ledger, specimen signature to be in custody of manager and other precautions.
  • Safe custody of/access to vouchers through written orders of manager records to maintain of those who have accessed such records.
  • Safe custody of specimen signature cards and verification of instructions in respect of operations of the account.
  • Bank draft forms to treat as security items and usual precautions take in respect of their issue and safe custody.
  • Precautions in writing of drafts - use to pin point typewriters or reverse carbon.
  • Way in which telegraphic/telex messages for telegraphic remittances should be sent - use of codes and accessibility to top most officers of branch etc.
  • Precaution against frauds perpetrated by employee - effective supervision, timely receipt of control returns and security thereof, rotation/transfer of staff etc. Strict watch on clearing operations, housekeeping, reconciliation of interbank/branch accounts.
  • Precaution against frauds perpetrated by staff in clearing – checking of Branch Clearing General a/c., dispatch of statement, verification of instruments with relative schedules,etc.
  • Safe transit of cheque and instruments between the branches/clearing houses.
  • Precaution to be taken to prevent fraud through entries in suspense account - periodical balancing and checking, signing of debit voucher by manager/officer authorized by him, sending periodical statement specifying reasons for non-adjustment for large and long outstanding entries,etc.
  • Precaution for averting frauds in the areas of letter of credit, issue of guarantees and co-acceptance facilities.
  • Bills discounting facility under L/C, co-acceptance should extend only to customers having regular sanctioned limits.
  • Devising standards for suitable internal control in computerized environment.
  • Micro filming of records, vouchers, books.
  • Evolving standards for fully computerized branches.
  • Replacement of unwilling workers in computer area.
  • Banks should introduce a return for staff members to ensure strict submission of the information of assets and liabilities and proper scrutiny thereof.
  • Obtaining photographs of depositors at the time of opening of accounts
  • Report fraud cases upto Rs. 25000 /- having involvement of an insider to police where recovery is not doubtful.

- Published/Last Modified on: December 26, 2016

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