PSU banks report fraud of over Rs 95,000 cr in Apr-Sep

In a staggering rise in bank fraud, the country's public sector lenders reported embezzlement of over Rs 95,760 crore in the first six months (April-September) of the current financial year (2019-20) with the number of cases reaching 5,743.

This was informed by Finance Minister Nirmala Sitharaman in a written reply to a Rajya Sabha question.

The amount involved of fraud cases reported in the first six months of FY20 is higher than the cumulative amount in the past five years, according to the data available with the finance ministry.

In the past five years from 2014 to 2018, the amount involved in frauds in scheduled commercial banks were nearly Rs 83,000 crore with cases reaching close to 19,500.

Official sources said that the marked rise in the amount involved in fraud could be due to the change in the pattern of reporting. Earlier, cases of fraud amounting to Rs 1 lakh and above were only being reported. But, after the government came out with strict measures to deal with bank frauds, no fraud cases are being spared.

Additionally, reporting of fraud cases has increased after the government's measures to curb corruption in banks.

The maximum number of 2,939 fraud cases were reported from the State Bank of India involving Rs 25,417 crore in the last six months, followed by the country's second-largest lender Punjab National Bank, which reported the fraud of Rs 10,822 crore in 225 cases.

Bank of Baroda, which was merged with Vijaya and Dena banks to become India's third-largest bank on April one this year, reported 180 fraud cases, involving Rs 8,273 crore in them.

Allahabad Bank, which is all set to be amalgamated with Indian Bank to become India's 7th largest public sector lender, Rs 6,508 crore fraud in cases in 724cases in the first six months of the current fiscal.

Bank of India, which recently came out of the Reserve Bank of India's prompt corrective action norms, reported fraud of over Rs 5,413 crore in more than 125 cases in between April and September this year, the minister informed.

The bank fraud data was made available to the ministry by the RBI.

She said the government has taken several measures to curb incidents of fraud, which include freezing of 3,38,000 bank accounts of inoperative companies in the last two years.

The Centre has also enacted the Fugitive Economic Offenders Act, 2018 to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. The law has a provision to confiscate the property of economic offenders, too.

Besides, instructions have been issued to the public sector banks to publish photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board-approved policy, and to obtain a certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore.