Bank Frauds, Big and Small

A recent response to an RTI request revealed that public sector banks, in the first quarter of this financial year alone, lost nearly Rs 32,000 crore through 3,000 cases of fraud. This, after a record-breaking Rs 71,500 crore worth of fraud was reported in FY19. The finance ministry has claimed to be turning around the situation with non-performing assets, and announced unprecedented rates of loan recovery. Finance minister Nirmala Sitharaman, earlier this month, announced the mergers of several state-owned banks in a bid to create larger, stronger, more stable banks. But, in a sluggish economy, with the slowest growth in six years, the mergers may dampen credit activity and get in the way of an economic revival. We’ll also have to wait and see if larger banks have better mechanisms to cope with frauds and bad loans.

`31,898.63 CRORE

Worth of scams perpetrated on public sector banks in the first quarter of FY20, said the RBI. Nature of fraud unrevealed but 2,480 cases have affected 18 PSBs

1,197

Of these cases, 48.3% of total, affected State Bank of India, worth `12,012.8 crore. SBI sought 147 lookout circulars for fraudsters between April and August this year

`2,855.46 CRORE

Worth of fraud detected by the Allahabad Bank in 381 cases, second only to SBI. And followed by Punjab National Bank reporting `2,526.55 crore from 99 cases of fraud

`71,542.93 CRORE

Worth of fraud reported in 6,801 cases of fraud in FY19, said RBI. An unprecedented amount, up from `41,167 crore from 5,916 cases reported in FY18

`17.9 LAKH CRORE

In total business of the newly merged PNB, Oriental Bank of Commerce and United Bank, making it the second largest PSB

53,334

Frauds, worth ₹2.05 lakh crore, reported from FY09 to FY19: PNB (`28,701 crore, 2,047 cases); SBI (`23,735 crore, 6,793 cases); ICICI (`5,034 crore, 6,811 cases)

12

PSBs in India, down from 27 in 2017. Mergers earlier this month reduced 10 PSBs to 4: the 2nd, 4th, 5th and 7th largest PSBs in the country

`89,189 CRORE

Decline in NPAs affecting PSBs, from `8,95,601 crore in March 2018 to `8,06,412 crore in March 2019, said finance minister Nirmala Sitharaman in the Rajya Sabha