India Loses Rs 100 Crore Per Day to Banking Fraud; Check Bank Names

According to RBI data, India has lost at least Rs 100 crore per day to bank fraud or scams over the last seven years, despite a year-on-year decrease in the total amount involved.

Maharashtra, the country’s financial capital, topped the list, accounting for half of the money involved, followed by Delhi, Telangana, Gujarat, and Tamil Nadu. According to the report, these five states accounted for more than Rs 2 lakh crore, or 83 percent, of the total amount of money lost to financial fraud. Banking fraud totaling Rs 2.5 lakh crore was detected across states between April 1, 2015 and December 31, last year.

The finance ministry, on the other hand, stated that measures put in place for prompt reporting and prevention had resulted in a year-on-year decrease in the incidence of fraud.

The RBI categorizes frauds into eight categories: misappropriation and criminal breach of trust; fraudulent encashment through forged instruments, manipulation of books of account or fictitious accounts, and conversion of property; unauthorized credit facilities extended for reward or illegal gratification; negligence and cash shortages; cheating and forgery; irregularities in foreign exchange transactions; and any other type of fraud not falling under the specific categories. A breakdown of these categories was not immediately available.

While banks spend a lot of time looking outside their walls for fraud, Sanjay Kaushik, managing director of Netrika Consulting, whose clients include banks, believes it would be more effective if they held insiders more accountable, especially when dealing with large advances and loans.

“There must be a process that assigns responsibility and holds those sanctioning such loans accountable, because many of these frauds occur because advances or loans were provided without collateral,” Kaushik said.

According to Bikash Gangadharan, a senior manager with an MNC bank, even when banks had collateral, no proper risk assessment was performed. “In US banks, for example, risk assessments of loans or advances are done on a regular basis, even every day in some cases. This does not happen in Indian banks, and I believe that establishing dedicated teams for this could go a long way toward identifying loans that may go bad early and, thus, acting before money is lost,” he said.

According to Y Sudarshan, former president of the All India Bank Officers Confederation, the rate of fraud is decreasing as a result of numerous measures put in place to not only punish those who commit financial malpractice, but also to prevent it.

According to the finance ministry, “improved detection and reporting, including legacy stock of NPAs, accompanied by comprehensive steps taken to check frauds have resulted in a sharp decline in occurrence.”

The amount of money lost to fraud decreased from Rs 67,760 crore in 2015-16 to Rs 59,966.4 crore in 2016-17. The following two years’ revenue totaled less than Rs 45,000 crore. In 2019-20, the figure fell to Rs 27,698.4 crore, then to Rs 10,699.9 crore in 2020-21. In the first nine months of this financial year, the amount is Rs 647.9 crore.

Name Of The Banks Given Below: