The Narendra Modi-led National Democratic Alliance government on Tuesday amended 2015 non-performing asset (NPAs) rules. The new rule mandated all NPAs over Rs 50 crore must be checked for fraud.

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Under the new rules, bank internal committees can now dispose off some of the pending cases if no fraud is apparent, CNBC-TV18 learnt.

Rest of the cases have to be sent to the Central Vigilance Commission (CVC) appointed advisory board for a prima facie check before asking for a forensic audit.

The government amended the Department of Financial Services instructions issued in 2015. The 2015 rule said any NPA over Rs 50 crore must first be examined for fraud which means it had to be sent for forensic audit.

Chief executive officer and managing director of a bank now will not be personally liable for timelines to ensure whether a case is fraud or not.

The CVC has appointed an advisory board to which all these cases could be referred to for a possible fraud detection.

An internal committee of senior bankers will first examine whether it is a vigilance case or simply a disciplinary case and if there is no prima facie evidence then they need not even send it to the advisory board. The remaining cases would be send to the advisory board of the CVC.

Here CNBC-TV18's Latha Venkatesh explains the impact of the changes in NPA rule.

First Published:Jan 28, 2020 10:12 PM IST