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RBI annual report: Counterfeit detection spikes, bank fraud value shoots up 74%

RBI annual report: Counterfeit detection spikes, bank fraud value shoots up 74%

RBI annual report: Counterfeit detection spikes, bank fraud value shoots up 74%
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By Abhishek Jha  Aug 30, 2019 9:11:22 AM IST (Updated)

The Reserve Bank of India released its annual report for 2018-19 on Wednesday, with the central bank highlighting that the detection of counterfeit notes spiked while the bank fraud cases have also risen significantly in the financial year 2019. Here are some interesting highlights from the report.

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Data published in the report shows that there is a spike in detection of counterfeit notes in the country. Compared annually, there is a 20 percent increase in detection of counterfeit 10 rupee notes. When it comes to 20 rupee notes, counterfeit detection has shot up by 87 percent. For 50 rupee notes, the reading is at 57 percent. It is only the 100 rupee note which has seen a decline of 7.5 percent in counterfeit notes. The total counterfeit 200 rupee notes increased from 79 last year to 12,728 this year. 500 rupee counterfeits increased a whopping 121 percent while in the case of 2,000 rupee notes, the spike was 22 percent.
The number of bank frauds cases have risen 15 percent In FY19 compared to the last fiscal, according the RBI annual report. Last year there were 5,900 cases reported while this year it has risen to 6,800. In value terms, there is a spike of 74 percent. The value of bank frauds in FY19 has come in at Rs 71,543 crore, which last year was at Rs 41,167 crore. Out of this, public sector banks have contributed 90 percent in value of total frauds in the system.
The average lag between date of occurrence of fraud and detection by banks is 22 months. However, the average lag in detection of large frauds of over Rs 100 crore is 55 months, according the report.
It is noteworthy that the Finance Ministry in February this year had directed public sector banks to probe all NPA accounts of over Rs 50 crore for possible fraud and accordingly report the cases to CBI.
There is also a trend reversal in value of currency circulation. 2000 rupee notes now constitute 31 percent of total circulated currency. This is down from 50 percent in 2017. Meanwhile, 500 rupee notes, which in 2017 made up for 22 percent of the circulated currency, now have a 51 percent weightage.
The overall currency in circulation has soared 17 percent to Rs 21.10 trillion, according the report. RBI has said that growth deceleration is a "soft patch mutating into cyclical downswing" and is not structural.
It has expressed concerns about the lack of domestic demand ailing “animal spirits” and suggested that it’s imperative to focus on reviving private investments
The report also shows that credit flow from NBFCs to commercial sector dipped 20 percent post the IL&FS crisis.
The report also shows that after a Rs 52,637 crore pay out to government from excess reserves, RBI's contingency fund now stands at Rs 1,96,344 crore
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