Finance Minister Pranab Mukherjee on Wenesday ruled out any systemic failure in alleged fraud at Citibank which is estimated at Rs 400 crore (Rs 4 billion) and said 'regular precautions are being taken'."There are regular regulations and all other precautions are being taken. But if there is an individual misdemeanour that has to be acted on. Law will take its own course of action," Mukherjee told reporters in New Delhi.
The alleged fraud which could run into Rs 400 crore (Rs 4 billion) was detected at Citibank's Gurgaon (Haryana) branch.
An FIR for cheating and forgery against a bank employee and three others was lodged and 18 accounts having close to Rs 4 crore (Rs 40 million) frozen were frozen on Tuesday.
The fraud is said to be a handiwork of Shivraj Puri, a relationship manager at the branch, who allegedly sold investment products to high networth clients claiming that they would generate unusually high returns.
It is also alleged that Puri, who is named in the first information report, showed a forged notification of market regulator Securities and Exchange Board of India for obtaining funds from customers.
He also allegedly routed the fund garnered from HNI customers to stock market through brokerage firms like Religare Securities.
He is also accused
of claiming that these products were authorised by the bank's investment product committee. Citibank India spokesperson said, "We immediately reported the matter to all the relevant regulatory and law enforcement authorities.
"Identified suspicious transactions have been isolated and we are providing full assistance to the authorities in their investigations.
"We recently initiated an investigation into a certain set of suspicious transactions based on documents forged by an employee involving a few accounts in our Gurgaon branch," the spokesperson said.
The bank said the issue did not impact other accounts or transactions or customers of the bank.
Meanwhile, Religare said Puri is a client with Religares broking business in his individual capacity since June 2009 and all KYC formalities and other due diligence has been followed.
"We have no knowledge of the details of this alleged scam," Religare said, adding it will cooperate and furnish all information, as and when required by investigating authorities on this matter.
