PSBs report `61,260cr worth frauds in 5 yrs, says RBI data

■ CBI approaches Interpol ■ ED summons Nirav Modi, Choksi

New Delhi/ Mumbai,

Feb. 16: Investors may have been shocked when one of India’s biggest banks disclosed a $1.77 billion fraud by billionaire jeweller Nirav Modi, but the RBI has recorded data that shows the problem runs far deeper and wider.

Reserve Bank of India data, which a Reuters reporter obtained through a right-to-information req-uest, shows public sector banks (PSBs) have reported 8,670 “loan fraud” cases totalling `61,260 crore over the last five financial years up to March 31, 2017. In India, loan frauds typically refer to cases where the borrower intentionally tries to deceive the lending bank and does not repay the loan.

The figures expose the magnitude of the problem in a banking sector already under pressure after years of poor lending practices. Bad loans surged to a record peak of nearly $149 billion last year.

Bank loan frauds have steadily increased as well, reaching `17,634 crore in the latest financial year from `6,357 crore in 201213, according to the data, which doesn’t include the PNB case.

Meanwhile, the ED summoned billionaire diamond merchant Nirav Modi and his business partner and jewellery chain promoter Mehul Choksi in connection with its money laundering probe even as agency sleuths expanded their search operation in properties linked to the accused, officials said.