The proposal is based on the draft prepared by the Law Commission chairman justice BP Jeevan Reddy on the proposed legislation to forfeit property of public servants possessing illegally acquired properties including cash, jewellery or any article of value and any interest in movable or immovable property.

The draft notes that the Prevention of Corruption Act and other such acts had failed to deal with corruption. The number of prosecutions under the Act is low and nothing can be done unless a person is convicted. The proposed law contemplates the issuance of a showcause notice by the CVC to public servants believed to be holding illegally acquired wealth and to explain andestablish the source of wealth. Refusal to disclose or false disclosure entails imprisonment in addition to forfeiture of such properties.

Vittal made these suggestions while addressing a conference on `fraud in banks related to cheques, drafts and remittances' held by the Mahratta Chamber of Commerce, Industries and Agriculture at Pune. To deal with increasing bank frauds and economic offences, Vittal called for a separate law on bank frauds and setting up of a specialised agency with the CBI for dealing with bank frauds.

These investigations should be centralised instead of various agencies dealing with economic offences and bank frauds. Vittal said the creation of a database of such corrupt elements and defaulters would help in detection and prevention of frauds. "This could be done by creating a synergy between the banking and insurance sectors and the CVC," he said. He asked the banks to communicate among themselves about any willful defaults of over Rs 25 lakh.