New Delhi: The Reserve Bank of India (RBI) has imposed penalties and ordered compensation against five private banks for lapses in monitoring fake accounts allegedly used in a major ‘digital arrest’ fraud.
The case involves Naresh Malhotra (78), a retired bank employee from Delhi. In August last year, unknown callers allegedly posed as senior officials from the CBI and the Enforcement Directorate, kept him under psychological pressure for nearly a month, and made him transfer money as instructed.
According to the complaint and subsequent scrutiny, Malhotra transferred Rs 22.9 crore to multiple bank accounts. After realising he had been cheated, he approached the police and also filed a grievance with the RBI’s ombudsman.
RBI’s inquiry found that Axis Bank, City Union Bank, ICICI Bank, IndusInd Bank and Yes Bank failed to adequately monitor suspicious/fake accounts and were lax in customer due diligence and anti-fraud checks during account opening and transactions. The ombudsman directed four banks to pay compensation equivalent to 5% of the transferred amount, while Yes Bank was asked to pay 7.5% citing additional deficiencies.
Malhotra has received Rs 1.31 crore as compensation from the five banks, and said an additional Rs 60 lakh was credited from frozen accounts. He has appealed to RBI seeking return of the entire Rs 22.9 crore with interest, and has also filed a criminal case in the Supreme Court. The CBI is currently investigating the matter.
