Bank frauds rise 10 times in two years: CBI

Thirty defaulters whose non-performing assets (NPAs) run into thousands of crores are being investigated by the CBI for fraud, the agency chief Ranjit Sinha has said
Bank frauds involving an amount more than Rs 50 crore also have increased by 10 times in two years, Sinha said.

Without giving details, Sinha said the bulk of NPAs in public sector banks is from 30 accounts and the agency has started the probe. The amount of NPAs has risen from Rs 59,924 crore in 2010 to Rs 1,17,262 lakh crore in 2012.

Addressing the fifth annual conference of chief vigilance officers of public sector banks and financial institutions and CBI officers, Sinha said a banker is a fellow who lends you his umbrella when the sun is shining but wants it back the minute it begins to rain.

"If we see the figures of NPAs and high number of high level fraud, it seems to be raining heavily. The question is whether the bankers will be able to get their umbrellas back or not and further even if they get it whether it would be in original shape or not," he said.

Speaking at the function, prime minister's key economic adviser C Rangarajan indicated banks may have to deal with higher NPAs on account of poor economic performance.

"NPA also increases because of the way economy behaves. If rise in bad loan is beyond control of banks, then banks need to be very careful in identifying NPAs. While judging increasing NPAs, banks should also take note of what is happening in the environment. Some amount of loan can for a time become NPA," he said.

Quoting from the provisional data of the RBI, the government on Monday said the NPAs of public sector banks as on June 30, 2913, year was Rs 1,76,009 crore. NPAs as on March 2012 was Rs 1, 12,489 crore and it rose to Rs 1,55,890 crore in March this year.
On bank frauds above the Rs 50-crore mark, Singh said there was a more than 10-fold increase from three cases in 2009-10 involving an amount of Rs 404.13 crore to 45 cases involving Rs 5,334.75 crore in 2013.

Quoting from RBI figures on the total number of cases of bank fraud, he said the number of cases has shown a decline of 46.47 per cent from 24,791 in 2009-10 to 13,293 in 2012-13. However, he pointed out that the amount has quadrupled from Rs 2,037.81 crore to Rs 8,646 crore, registering an increase of 354.27 per cent.

Sinha said there should be a concerted effort from the part of banks, the CBI and state police to tackle “big-ticket” frauds.

“There is reluctance on the part of banks to declare NPAs frauds despite their being clear evidence. There are also differences between the CBI and banks over fixing accountability of the staff. We must realise that fight against financial fraud is a concerted effort,” Sinha said.

He was of the view that banks need to realise that delay in reporting of frauds adversely affects tracking and recovery of proceeds of crimes. "In my view there should be no reason for denial of sanction for prosecution wherever mala fide acts by delinquent officials caused huge losses to banks," he said.