RBI Governor Shaktikanta Das held a meeting with the MD and CEOs of public sector banks and select private sector banks today, in Mumbai.
Reserve Bank of India’s (RBI) Governor Shaktikanta Das on July 3 held meetings with the MDs and CEOs of public sector banks and select private sector banks in Mumbai and urged them to step up their efforts against ‘mule accounts’.
He also asked them to intensify customer awareness and educational initiatives, among other measures, to curb digital frauds.
A mule account is an account created by one person but operated by another person. These accounts are often used for money laundering and tax evasion.
Mule accounts are in violation of several rules and can be prosecuted under the Prevention of Money Laundering Act (PMLA). Also, such arrangements are illegal under tax laws. Even Sebi and Reserve Bank of India (RBI) rules say such accounts should not be used.
Das also emphasised the need for banks to ensure robust cybersecurity controls and effectively manage third-party risks.
At the meeting, topics such as persisting gap between credit and deposit growth, liquidity risk management, ALM-related issues, trends in unsecured retail lending, cybersecurity, third-party risks, and digital frauds were discussed, as per RBI’s release.
Discussion were also held on strengthening of assurance functions, credit flows to MSMEs, increasing usage of Indian Rupee for cross-border transactions, and banks’ participation in innovation initiatives of the Reserve Bank.
Das during the meeting also highlighted the importance of further strengthening the governance standards, risk management practices and compliance culture in banks.
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Courtesy: www.moneycontrol.com
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