Develop multi-pronged strategy to combat fin crimes at their genesis Parl panel tells MCA

New Delhi, Aug 4 (PTI) A Parliamentary panel on Monday asked the Ministry of Corporate Affairs to develop a proactive and multi-pronged strategy to combat financial crimes at their genesis as well as bolster the investigatory and prosecutorial efficacy of the Serious Fraud Investigation Office (SFIO).
     In a report, the Parliamentary Standing Committee on Finance also urged the ministry to accelerate hiring at the National Financial Reporting Authority (NFRA) as well as put in place a "truly transparent and result-oriented CSR oversight system".
     Under the Companies Act, 2013, a certain class of profitable companies are required to shell out at least 2 per cent of their three-year average annual net profit towards Corporate Social Responsibility (CSR) activities.
     The panel has recommended that the ministry furnish a comprehensive, evidence-based report detailing the impact of SFIO's referrals and a detailed judicial analysis of prosecutions.
     Further, it has urged the ministry to "develop a proactive and multi-pronged strategy for combating financial crimes at their genesis, a time-bound implementation roadmap for all proposed reforms with clear monitoring in coordination with all stakeholders concerned, while concomitantly exploring the integration of dedicated specialised forensic acumen, such as Certified Fraud Examiners (CFEs), to bolster SFIO's investigatory and prosecutorial efficacy".
     The committee also flagged the challenge in filling sanctioned positions within NFRA. As of FY 2024-25, only 32 out of 69 posts have been filled.
     There is an urgent need to significantly accelerate the recruitment process to fill all vacant positions within a defined time frame. This necessitates drawing up a roadmap for establishing a dedicated, permanent cadre of skilled professionals for NFRA, it noted.
     "This roadmap should also address current recruitment bottlenecks by potentially reviewing and revising recruitment rules for higher echelons, where appropriate, to reduce the over-reliance on deputation. Additionally, the roadmap should outline robust strategies for professional development and retention to build a stable and expert workforce, which is crucial for NFRA's vital oversight of Public Interest Entities," the report said.
     With respect to the CSR regime, the panel said there should be a truly transparent and results-oriented CSR oversight system requiring companies to submit and the ministry to publish, analytical reports detailing the actual socio-economic impact of CSR projects, not just how much was spent.
     Also, the committee has called for creating a public system to transparently track all unspent CSR funds to ensure they are properly used and for implementing a clear policy for monitoring and accountability of all agencies that carry out CSR projects, ensuring funds are used wisely and as intended.
     The recommendations are part of the committee's action taken by the government on the observations/recommendations contained in the 10th report of the Standing Committee on Finance on 'Demands for Grants (2025-26) of the Ministry of Corporate Affairs'.

(This story has not been edited by THE WEEK and is auto-generated from PTI)