Banks seek RBI approval for parallel fraud investigations. Indian lenders are planning to approach the Reserve Bank of India requesting permission to conduct internal investigations simultaneously with law enforcement agency probes into borrower accounts. Currently, banks must immediately red flag accounts when LEAs initiate investigations, often creating misalignment between regulatory fraud tagging and ongoing agency investigations due to limited information sharing. The move follows a Supreme Court ruling eliminating the requirement for personal hearings before fraud account classification. Banks argue that investigation agencies frequently cannot complete probes within the mandated 180-day timeline for account status decisions, creating legal vulnerability.
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