Indian Banks Experience 1 Fraud Every Hour; Rs 1.6 Crore Loss Every Hour Recorded!

These numbers are for the period before Punjab National Bank’s massive fraud of $2 billion or Rs 13,000 crore was unveiled.


Indian Banks Experienced 1 Fraud Every Hour

In a year with 365 days, there are 8760 hours. However, in a year, there were 12,533 cases of banking frauds reported in India.

Hence, the number of hours is failing miserably to keep up with the number of banking frauds happening in India.

Time to wake up?

Indian Banks: Mecca Of Banking Frauds

Between April 2016 and March 2017, Indian banks reported a total of 12,533 cases of frauds, all across the country.

These findings were shared by Institutional Investor Advisory Services, which is a proxy advisory firm.

If we calculate the amount of loss which happened due to these 12,533 banking frauds, then the amount would be Rs 18,170 crore ($2.79 billion).

Hence, Rs 1.6 crore was lost every hour to banking frauds.

And these numbers are for the period before Punjab National Bank’s massive fraud of $2 billion or Rs 13,000 crore was unveiled, which was successfully executed by Nirav Modi.

Why Are Such Frauds Happening?

It is mainly due to poor audits, and corrupt officials.

KC Chakrabarty, former deputy governor of the Reserve Bank of India had earlier said,

“Such high quantum of frauds can be attributed to weak internal controls, which are capable of leaving an indelible dent on the balance sheet of the bank,”

Bank Of Maharashtra #1 In Frauds; PNB Too Hogs The Limelight!

If we talk about the number of frauds happening in India, then the Bank Of Maharashtra is the #1 bank with 3893 frauds reported last year. Closely following is ICICI Bank with 3359 frauds, and at #3 is HDFC Bank with 2319 frauds.

In terms of value, 1.02% of overall assets governed by Bank of Maharashtra is fraud-infected.

The report says, “Added to a gross NPA of about 19%, this means more than one-fifth of the asset size is at risk every year due to weak controls and lack of adequate due diligence,”

If we speak about the amount of fraud, then Punjab National Bank is #1 with Rs 2810 crore lost due to frauds. This was before $2 billion Nirav Modi fraud hit the bank. At #2 is Bank of India with Rs 2770 crore fraud infected money and at #3 is India’s largest bank, SBI, with Rs 2420 crore.

Interestingly, public sector banks have 45% of on-site banking audits, which is almost 9 times of what private banks do. But still, Govt banks are #1 in frauds.

Who will stop this rot in the system?

We are keeping our fingers crossed.

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