Banking frauds have continued to rise over the past three years despite a recent crackdown, the government data showed.
The number of fraud cases jumped from 4,693 cases in 2015-16 to 5,076 cases in 2016-17 and 5,917 in 2017-18 in scheduled commercial banks, as per data disclosed in the Lok Sabha on December 21. In the case of public sector banks, fraud cases rose from 2,789 in 2015-16 to 2,718 in 2016-17 and 2,885 in 2017-18.
Loan accounts worth Rs 69,755 crore were involved in banking frauds over the three years, with the Rs 14,000 crore Nirav Modi-Mehul Choksi case being the biggest fraud of all.
The scam at Punjab National Bank, allegedly perpetrated by jewelers Nirav Modi and Mehul Choksi, was a case of lax detection and oversight.
The country’s biggest loan fraud was allegedly committed by two junior officials at a Mumbai PNB branch, who issued unauthorized “letters of undertaking” (LoU) via SWIFT for firms linked to the two jewellers.
According to the Ministry of Finance, several measures have been put in place to prevent the occurrence of frauds including setting up a framework for timely detection, reporting, and investigation of large frauds within public sector banks.
Loan accounts exceeding Rs 50 crore, if classified as NPAs, are to be mandatorily examined by banks from the angle of possible fraud and a report is be placed before the bank’s committee for Review of NPAs on the findings of this investigation.
Further, state-owned banks have also adopted the practice of online verification of credit information report and wilful defaulter list to mitigate fraud.
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First Published: IST