There have been over 50,000 bank fraud cases hitting the Indian banks in the last 11 fiscal years. Right from big PSBs to small ones, private banks even international banks with their branches in India, these financial institutions have engraved their names in the list of fraud committing bodies. Unscrupulous businessmen running away with huge sums of taxpayer’s money and laundering isn’t uncommon.
There are however several measures taken by the Indian government and the regulatory body RBI in mitigating and discovering fraud cases by banks.
The Gigantic Numbers of the Scandalous Bank Frauds
53,334 cases of bank frauds have been recorded in last 11 fiscal years, involving an amount of Rs 2.05 lakh crore with ICICI bank, SBI and HDFC Bank reporting the highest numbers of frauds, according to RBI. The list of banks along with their fraud amounts are enlisted as under:
- ICICI showed the highest number of fraud cases of 6,811, involving Rs 5,033.81 crore.
- SBI: 6,793 frauds of Rs 23,734.74 crore.
- HDFC: 2,497 cases of Rs 1,200.79 crore.
- Bank of Baroda: 2160 cases of Rs 12,962.96 crore.
- PNB: 2,047 frauds of Rs 28,700.74 crore.
- Axis Bank: 1,944 frauds involving RS 5,301.69 crore.
- Bank of India: 1,264 frauds of Rs 5978.96 crore.
- Standard Chartered Bank: 1,263 cases involving Rs 1221.41 crore.
- Canara Bank: 1,254 cases of Rs 5553.38 crore.
- Union Bank of India: 1,244 frauds of Rs 11,830.74 crore.
- Kotak Mahindra: 1,213 cases involving Rs 430.46 crore.
- Indian Overseas Bank: 1,115 frauds involving Rs 12,644.7 crore.
- Vijaya Bank: 639 cases involving Rs 1,748.9 crore.
- OBC: 1040 cases of Rs 5,598.23 crore.
- Yes Bank: 102 cases of Rs 311.96 crore
- United Bank of India: 944 cases of Rs 3052.34 crore.
- State Bank of Mysore: 395 cases of Rs 742.31 crore.
- State Bank of Patiala: 386 cases of Rs 1178.77 crore.
- Punjab and Sind Bank: 276 cases of Rs 1154.89 crore.
- UCO Bank: 1081 frauds of Rs 7104.77 crore.
- Tamilnad Mercantile Bank: 261 cases of Rs 493.92 crore.
- Lakshmi Vilas Bank: 259 frauds Rs 862.64 crore.
- State Bank of Travancore: 274 cases of Rs 694.61 crore.
- Jammu and Kashmir Bank: 142 cases of Rs 1639.9 crore.
- Industrial Finance Corp of India: 9 cases of Rs 671.66 crore.
- Dhanlakshmi Bank: 89 cases of Rs 410.93 crore.
Foreign banks operating in India are no better.
- American Express Banking Corporation: 1,862 frauds of Rs 86.21 crore.
- Citi Bank: 1,764 cases of Rs 578.09 crore.
- HSBC: 1,173 frauds of Rs 312.1 crore.
- Royal Bank of Scotland Plc: 216 frauds involving Rs 12.69 crore.
Measures Taken by RBI and Govt to Curb Bank Frauds
Money laundering and bank frauds have been increasing with time and RBI along with the govt has taken certain measures to curb the same.
- RBI introduced Legal Entity Identifier (LIE) last year to check and prevent banking frauds. It is a 20-digit global reference number, identifying a company. RBI mandated all its borrowers to issue an LIE code, which will help banks to monitor debt and prevent issuing multiple loans to the same collateral. It is an identification proof of firm and facilitates tracking and transaction reporting by the regulators.
- PSBs have been asked to inspect all bad loan accounts above Rs 50 crore.
- PSBs have been asked to rationalize overseas operations.
- Proposal to establish National Financial Reporting Authority(NFRA) as an independent regulator for the auditing
- An expert committee to look into rising instances of fraud.
- Mandatory reporting of the stressed accounts above Rs 5 crore on a weekly basis, to strengthen the banking sector.
- PSBs have been given 15 days to address technological and operational risks and put the house in order.
Many of these rules have come into action and are stronogly being supported by the parliamentary and judiciary bodies.