Calling for a proactive approach to reporting of loan frauds, Reserve Bank Deputy Governor S S Mundra has said up to four years of "NPA seasoning" has been observed in reporting of such cases, which exposes bankers to the risk of being charged with "abetting" the offence.

"In almost all the cases, we have observed that the exposure has got seasoned as an NPA for three to four years before the borrower was declared fraudulent….banks and bankers could be charged for abetting the criminal offence. My call to you therefore, is to identify and declare the account as fraud without wasting time," Mundra said, adding that as much as 92 per cent of financial frauds are loan-related.

He rued that the gap between the date of occurrence of the fraud and detection of the same has been widening.

In the remarks made during a closed door bankers' event on Monday and published late last evening, Mundra said delay in reporting of a fraud can have "far-reaching implications on the employee conduct and internal governance standards".

Mundra did not refer to any particular case while making the remarks, which came days after the entire brass of state-run IDBI Bank was arrested for allegedly conniving to sanction loans for the fugitive businessman Vijay Mallya.

Mundra also said despite Reserve Bank raising flags on cyber security, banks continue to have "significant" gaps in their architectures and asked the boards of respective banks to monitor the same.

"Banks were advised to assess the gaps in their preparedness vis-a-vis the baseline requirements prescribed by RBI and to draw a time-bound plan to bridge the gaps urgently.

"The assessment reveals that barring a few banks the gaps are indeed significant, more so in respect of public sector banks," he said.

"This warrants immediate and continued attention of the board and senior management of banks," he said.

Citing the recent incidents of ATM and debit card frauds which resulted in millions of debit cards being replaced, Mundra said there is a need to appoint a chief information security officer (CISO) and radically change budgeting for cyber security.

The CISO should be senior in hierarchy, understand technology well and should be sufficiently enabled to stall launch of unsecure products, he said