Delhi HC: Saying “Maro Sale Ko” During a Fight Alone Does Not by Itself Establish Intent to Kill  ||  Delhi HC Ordered Removal of Fake News About Judges’ London Badminton Event, Restrained its Sharing  ||  Bombay HC: Calling Police over Routine Transfers or External Complaints is Misconduct  ||  Delhi HC Upheld EC’s Decision Banning Political Ads in the Delhi Metro During Model Code of Conduct  ||  Delhi HC: In the Telegram Case Entire Social Media Platforms Can Be Blocked U/S 69A of the IT Act  ||  Supreme Court: Pedestrians' Right to Footpaths Cannot be Overridden by Motorists  ||  Supreme Court: Financier Cannot Seek Insurance For a Vehicle Surrendered by its Owner  ||  Madhya Pradesh High Court: Victims Must be Given a Hearing Even Before Closure Report Rejection  ||  Delhi HC: Payment of ‘Pagri’ Does Not Render Tenancy Non-Terminable, Allowing Eviction  ||  Ker HC Examined Whether Electro-Homeopathy Can be Practised Without Registration under Medical Laws    

Reserve Bank of India issues Revised Master Directions on Fraud Risk Management in the Regulated Entities - (15 Jul 2024)

Banking

The Reserve Bank of India (RBI) has issued three revised Master Directions on Fraud Risk Management applicable to various Regulated Entities (REs). These include Commercial Banks (including Regional Rural Banks) and All India Financial Institutions, Cooperative Banks (Urban, State, and Central), and Non-Banking Financial Companies (including Housing Finance Companies).

These revisions stem from a thorough review of previous Master Directions and Circulars, addressing emerging issues in the sector. The updated Master Directions are principle-based, reinforcing the Board's role in governance and oversight of fraud risk management within the REs. Emphasis is placed on establishing a robust internal audit and control framework.

A significant addition to the Master Directions is the explicit requirement for REs to comply with the principles of natural justice in a timely manner before classifying individuals or entities as fraudulent. This directive aligns with the Supreme Court's judgment on March 27, 2023 (Civil Appeal No. 7300 of 2022, State Bank of India & Ors. Vs. Rajesh Agarwal & Ors.).

The framework for Early Warning Signals (EWS) and Red Flagging of Accounts (RFA) has been further strengthened to facilitate the early detection and prevention of frauds, ensuring prompt reporting to Law Enforcement Agencies and Supervisors. Additionally, the incorporation of Data Analytics and a Market Intelligence Unit is mandated to enhance risk management systems.

These revised Directions are now also applicable to Regional Rural Banks, Rural Cooperative Banks, and Housing Finance Companies. This extension aims to foster improved fraud risk management systems and frameworks across these entities.

Consequently, the existing 36 Circulars on this subject have been withdrawn, streamlining the instructions and reducing the compliance burden on the REs.

Tags : RBI   RE   EARLY WARNING SIGNALS   RED FLAGGING OF ACCOUNTS  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved