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Fraud and Vigilance in Banks
What is the RBI's definition of 'fraud' as applicable to banks?
Fraud is defined as a deliberate act of omission or commission by any person carried out to deceive, gain unlawful advantage, or cause wrongful loss to a bank, resulting in financial or reputational damage.
What is the Prevention of Money Laundering Act (PMLA) and its relevance to bank fraud?
PMLA 2002 criminalises money laundering and empowers ED to attach proceeds of bank fraud.
Which RBI Master Direction governs fraud classification and reporting by banks?
The RBI Master Direction on Frauds – Classification and Reporting by Commercial Banks and Select FIs (2016, updated periodically) governs fraud classification and reporting obligations.
What is a 'phantom borrower' fraud in the context of bank lending?
A fictitious person or non-existent entity fraudulently obtains bank loans.
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