CBI doesn’t need anyone’s permission to investigate corporate frauds

India Inc’s big business houses that secured huge loans from state-run banks post but defaulted on repayments or escaped by restricting the loans will now remain under an all-time scanner of India’s Central Bureau of Investigation (CBI). The agency, which is so far known for its criminal investigation, might soon become the default lead investigator of frauds by India’s big-ticket corporates.

An Economic Times report stated that after recently being asked by the Ministry of Finance to investigate the top 10 cases of default in which fraud is suspected at the government banks, CBI officials have sought broader powers. Currently, the probe agency have to cross many obstacles when it comes to gathering info and conducting raids in the big bank fraud cases it's probing.

The financial daily further stated that this is the reason why it wants the central government to specify the offences or categories of such infringements that need to be investigated under Section 3 of the Delhi Special Police Establishment Act.

This change might be implemented by the government through a gazette notification. Besides being notified as the main investigator for such cases, CBI wants chief vigilance officers (CVOs) at state-run banks to be appointed as nodal officers. At present, the bank CVO has to refer any purported fraud to the Central Vigilance Commission (CVC), which then asks CBI to probe the case.

The CBI enjoys the freedom to take up the case or refuse it by stating that the fraud is of a low amount and can be probed by the economic offences wing of the state police. A CBI official told ET that with this amendment to the Delhi Special Police Establishment (DSPE) Act, the investigative agency can directly pick up high-value cases. In return, this will speed up the investigation and will also result in better coordination between banks and the CBI.

Currently, the CBI is probing a loan obtained by the defunct Kingfisher Airlines from IDBI Bank in 2009. The KFA had already missed repayments on borrowings worth Rs 7,500 crore to a consortium of 17 banks led by State Bank of India (SBI).
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