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Frauds cost banks Rs 71,500 cr in 2018-19: RBI

NEW DELHI: Over 6,800 instances of financial institution fraud involving an remarkable Rs 71,500 crore have been reported in 2018-19, the Reserve Bank of India (RBI) has said.

A total of 5,916 such instances had been reported via banks in 2017-18 involving Rs 41,167.03 crore, it said.

As many as 6,801 instances of fraud had been reported via scheduled business banks and make a choice monetary institutions involving an amount of Rs 71,542.93 crore in the ultimate fiscal (increase of over 73 in line with cent in the fraud amount), the Reserve Bank said in respond to an RTI query filed via this PTI journalist.

RBI to financial institution on information analytics for timely fraud detection

In the ultimate 11 fiscal years, a complete of 53,334 instances of fraud had been reported via banks involving a massive amount of Rs 2.05 lakh crore, the central financial institution's information said.

During 2008-09, a complete of 4,372 instances had been reported involving an amount of Rs 1,860.09 crore. In 2009-10, Rs 1,998.94 crore price fraud was reported in 4,669 instances.

A total of 4,534 and 4,093 such instances had been reported in 2010-11 and 2011-12 involving Rs 3,815.76 crore and Rs 4,501.15 crore, respectively.

In the 2012-13 fiscal, 4,235 fraud instances involving Rs 8,590.86 crore had been reported via banks as against 4,306 instances (involving Rs 10,170.81 crore) in 2013-14 and 4,639 instances (involving Rs 19,455.07 crore) in 2014-15, the RBI said.

As many as 4,693 and 5,076 instances of fraud had been reported in 2015-16 and 2016-17 involving Rs 18,698.82 crore and Rs 23,933.85 crore, respectively, it said.

"Cases of fraud reported to RBI are required to be filed by banks as criminal complaints with law enforcement agencies. The information in respect of action being taken or already taken is not available readily," the central financial institution said.

The information assumes importance as banks are grappling with high-profile fraud instances involving absconding billionaire Nirav Modi and liquor baron Vijay Mallya among others.

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The large-scale fraud had triggered anti-corruption watchdog Central Vigilance Commission (CVC) to do an analysis and it came out with a report on most sensible 100 frauds.

The analysis focussed at the modus operandi, amount involved, form of lending (consortium or person), anomalies observed, loopholes that facilitated perpetration of the fraud involved and the systemic growth required to plug the gaps in the gadget and procedures.

The frauds had been classified and analysed for 13 sectors, together with gem and jewellery, production and industry, agriculture, media, aviation, provider and venture, discounting of cheques, trading, knowledge technology, export trade, mounted deposits, demand loan and letter of comfort.

The measures suggested via the CVC included strengthening same old running procedures (SOPs) and the tracking gadget, among others.

The CBI in 2018 booked most sensible officials of two public sector banks, a former CMD of IDBI Bank, former Aircel promoter C Sivasankaran, his son and corporations controlled via him in connection with a Rs 600-crore loan fraud in the IDBI.

The investigative company named 15 financial institution officials who worked at senior ranges at the IDBI in 2010 and 2014 when loans had been sanctioned to companies controlled via Sivasankaran, in its FIR registered on a complaint from the CVC.

Managing director and CEO of Indian Bank, Kishor Kharat (who was then MD and CEO of IDBI Bank) and his counterpart in Syndicate Bank, Melwyn Rego (then deputy managing director in IDBI Bank) in conjunction with then Chairman-cum-Managing Director of IDBI Bank M S Raghavan, have been named in the most recent FIR filed via the CBI.

Central businesses like the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) also are probing big-ticket financial institution fraud instances.

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