Banks in India currently rely heavily on external investigative agencies—the CBI and police—to conclusively classify accounts as fraudulent before taking action. This dependency creates bottlenecks: investigations drag on, findings vary across agencies, and recovery timelines stretch.
Leading banks have now petitioned the RBI to allow parallel internal investigations. The proposal would let lenders assess suspected fraud cases independently while law enforcement conducts its own probes, both running simultaneously.
The move targets three core problems: slow fraud classification that delays risk provisioning, inconsistencies when multiple agencies investigate the same case, and weak coordination in multi-bank lending scenarios where fraud may span several lenders.
If the RBI approves, banks would gain speed in flagging accounts as fraud, reducing their dependency on external agencies to move first. Faster classification enables quicker recovery actions, better asset quality reporting, and earlier risk containment.
Internal parallel investigations would also sharpen banks' own detection systems. By building forensic capability in-house, lenders can identify red flags earlier and coordinate more effectively when a borrower has exposure across multiple institutions.
