He told reporters that a draft bill for this was being prepared in consultation with the Law Commission.

The bill would cover even "benami" transactions and property owned by "friends and relatives," Vittal said.

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 and establish the source of wealth. Refusal to disclose or false disclosure entails punishment of imprisonment in addition to forfeiture of such properties.

Vittal made these suggestions while addressing aconference 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 amongst themselves about any wilful defaults of over Rs 25 lakh to avoid sequential cheating by fraudulent customers. The list of such defaulters must be made public to bring about a discipline in the banking and financial sector.

"There is no need to protect the privacy of someonewilfully defaulting banks," Vittal said.

Regarding the resentment to the CVC's order of `no post-tender negotiations', Vittal said that there could be no compromise on this as "the Gangotri of corruption is government tenders".

There exists a biradri or caste system prevalent in the bureaucracy where corrupt officials are protected by their cadre and an attack on the system was needed. Vittal said that a clean system was needed not merely on moral grounds but also because it has an economic consequence -- "a lot of corruption in the system may lead to an economic collapse."