CBI, banks differ over fair hearing to ‘old’ cases of ‘fraud’
banks and the Central Bureau of Investigation (CBI) over ‘old’ cases of ‘fraud’. The central agency, it is understood, is insisting on what could be a retrospective application of last year’s Supreme Court (SC) ruling that a borrower must be given a hearing before the account is classified as ‘fraud’ and a “reasoned order” must follow if such an action is taken.
However, in several old cases where the accounts were tagged as ‘fraud’ well before the SC ruling, CBI has asked banks whether the borrowers were granted the opportunity to explain their position, a senior industry person told ET.
Bankers are unwilling to go back to these past matters. “We believe banks are not required to do this as the decisions to categorise the accounts (as fraud) were taken before March 2023 (when the apex court spelt out its stand). Banks are of the view that the ruling is not applicable to old matters. But the agency has referred quite a few old cases back to banks, asking them if borrowers were accorded a hearing,” said another person.
Banks fear that pursuing such a course now could hold up investigation, encourage borrowers to contest the matters afresh, delay closures, and may even derail the process in some cases.
“We don’t know why they are doing it. Maybe, because they are saddled with so many cases. The industry may jointly take up the matter with the CBI and other authorities,” said another person.
A week ago, the matter came up for discussion during a routine meeting of the Indian Banks’ Association among some of the
