Legal Question in Banking Law in India

Sir,

State Bank of india has detected some irregularity done by an employee in the Bank.The Bank presuming that it is an financial fraud done by the employee referred the case to EOW/Police for further detailed investigation. After the detailed EOW/Police investigation the EOW/Police has given the clean chit to the employee and stated in their report that no fraud has been committed by the employee, in this case can the Bank still blame the employee for the same allegation for which the EOW/Police has given him the clean chit.


Asked on 9/13/13, 11:32 pm

3 Answers from Attorneys

if bank take any action u may file writ petition before High court.

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Answered on 9/14/13, 12:09 am
Fca Prashant Chavan Expert Edge LLP

14.09.2013

Dear Sir / Madam,

A Chartered Accountant is the best individual to detect fraud. SBI has to first get the independent investigation done and reported by its duly empaneled and appointed Internal / Concurrent Auditor. It is their specialization which comes into play to confirm and conclude whether the concerned employee has actually committed the alleged fraud in the bank. Without first obtaining the Internal Auditor's report, it makes no sense whatsoever going to EOW & Police to investigate the issue. If the Internal Auditor certifies that the concerned employee has not committed the fraud, the bank cannot blame the concerned employee for the same allegation anymore.

Regards,

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Answered on 9/14/13, 12:15 am
J. Radhakrishnan independent Practice

The EOW/Police may absolve the employee from criminal prosecution. Yet, if there were procedural irregularities bordering on negligence and failing to adhere to prudential guidelines of the bank, the bank can take disciplinary proceedings.

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Answered on 9/14/13, 2:05 am


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