Bank fraud: India loses 100,000,000 rupees every day due to bank fraud | India Business News

India has lost at least Rs 100 crore every day to bank fraud or scams for the past seven years, although there has been a year-on-year reduction in the total amount involved, according to the RBI data.
Maharashtra, home to the country’s financial capital, tops the charts, accounting for 50% of funds at stake, followed by Delhi, Telangana, Gujarat and Tamil Nadu. These five states together accounted for more than Rs 2 lakh crore, or 83%, of the amount of money lost to financial fraud, according to the report. Between April 1, 2015 and December 31 last year, a bank fraud worth Rs 2.5 lakh crore was detected in all states.
The Department of Finance, however, said measures put in place for early reporting and prevention had led to a decrease in the incidence of fraud year on year.
RBI classifies fraud into eight categories: embezzlement and criminal breach of trust; fraudulent collection using counterfeit instruments, manipulation of account books or through fictitious accounts and misappropriation of property; unauthorized credit facilities granted for reward or unlawful gratification; negligence and lack of liquidity; cheating and forgery; irregularities in foreign exchange transactions and any other type of fraud not falling under the specific headings above. A breakdown in each of these categories was not immediately available.
Sanjay Kaushik, managing director of Netrika Consulting, whose clientele includes banks, said that although banks spend a lot of time looking for fraud outside their walls, it would be effective to make insiders more accountable, by particularly when it comes to large advances and loans.
“There needs to be a process that assigns responsibility and holds accountable those who sanction these loans, because a lot of these frauds happen because advances or loans were given without collateral,” Kaushik said.
Bikash Gangadharan, a senior manager of a multinational bank, said that even where banks had collateral, no proper risk assessment was carried out. “In US banks, for example, the risk assessment of loans or advances is done regularly, every day in some cases. This does not happen in Indian banks and I think the establishment of teams dedicated to this could go a long way in identifying loans that could go wrong early and therefore act before the money is lost,” he said.
Y Sudarshan, former chairman of the All India Bank Officers Confederation, said the rate of fraud is decreasing due to many measures put in place not only to punish those who engage in financial malfeasance but also to prevent them.
According to a statement from the Ministry of Finance, “improved detection and reporting, including old NPA stock, accompanied by comprehensive measures taken to control fraud, has resulted in a sharp drop in occurrence.”
From Rs 67,760 crore in 2015-16, the amount of money lost due to fraud fell to Rs 59,966.4 crore in 2016-17. The next two years brought in less than Rs 45,000 crore. In 2019-20, the number dropped further to Rs 27,698.4 crore and then to Rs 10,699.9 crore in 2020-21. The amount for the first nine months of this fiscal year stands at Rs 647.9 crore.