Total fraud at banks soars 74% to Rs 71,543 cr in 2018-19, says RBI; PSBs account for bulk of cases

Mumbai: Banks reported a total fraud of Rs 71,543 crore in 2018-19, a 74 percent increase as against Rs 41,167 crore in the previous financial year, according to a report by the Reserve Bank of India. The number of fraud cases reported by lenders also jumped to 6,801 in 2018-19, compared to 5,916 cases in 2017-18. “Public sector banks accounted for a bulk of frauds reported in 2018-1955.4 percent of the number of cases reported and 90.2 percent of the amount involved—mainly reflecting the lack of adequate internal processes, people and systems to tackle operational risks,” the RBI’s report on ‘Trends and Progress of Banking 2018-19’ showed. [caption id=“attachment_4646581” align=“alignleft” width=“380”]  Representational image. News18.[/caption] In February 2018, the government had issued a framework for timely detection, reporting and investigation of frauds in public sector banks (PSBs). It required these lenders to evaluate non-performing accounts exceeding Rs 50 crore from the angle of possible frauds, to supplement the earlier efforts to unearth fraudulent transactions. This appears to have caused the sharp jump in reported frauds in 2018-19, the report said. Private sector lenders and foreign banks accounted for 30.7 percent and 11.2 percent, respectively, of the total number of reported fraud in 2018-19. Their share in the amount involved in the frauds reported were 7.7 percent and 1.3 percent, respectively. PSBs’ share in the value of large frauds was even higher at 91.6 percent in 2018-19. In the bank advances category, there were 3,606 number of fraud cases involving Rs 64,548 crore reported in 2018-19. The banks reported 13 cases of fraudulent foreign exchange transactions worth Rs 695 crore. There were 1,866 fraud cases involving Rs 71 crore related to card or internet transactions.