Mumbai, Nov. 8 -- Banks are considering asking the Reserve Bank of India (RBI) to ease classification norms for fraud-hit loan accounts, amid a surge in such cases in India.
Banks currently set aside capital worth the full value of their dues from a fraud-hit loan account over a period of four quarters to cover the risk of defaults by the borrower. Lobby group Indian Banks' Association is considering asking RBI to allow banks to classify only that part of the loan amount as fraud where fraudulent transactions have been detected.
"A forensic audit helps us identify transactions where fraud has taken place. So the question is whether only that portion should be declared as fraud or the entire account?" a senior banker aware of the matter sa...