"One area that has come into sharper focus in the last couple of years is the control and management of internal accounts. We found certain banks having lakhs of such accounts with apparently no valid reason," RBI Deputy Governor Swaminathan J said on Tuesday in his address to lenders, represented by chief financial officers (CFOs) and auditors.
"Some of these accounts are used for fraudulent transactions and ever-greening of loans. Internal accounts are high-risk in nature on account of its potential for misuse," he said while asking the CFOs to rationalise those accounts and bring them down to the essential minimum.
Last week RBI Governor Shaktikanta Das, during his interaction with bank chiefs, had raised the issue of mule accounts (illegal accounts) and asked them to curb digital frauds.
Swaminathan said CFOs must protect the integrity of the financial reporting by guarding against misadventure, or intelligent interpretations of regulations or accounting standards.
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