Bank Frauds Of Rs 1 Lakh & Above Value Doubled In FY20: RBI Annual Report

The Reserve Bank of India's (RBI) annual report released on Tuesday showed that frauds reported by banks of Rs 1 lakh and above have more than doubled in value to Rs 1.85 trillion in the financial year 2019-20, with the number of cases rising 28 percent in the same period.

Note that while these frauds were reported in 2019-20, the date of their occurrence falls over several previous years. Moreover, a majority of these frauds, that is 98 percent, are in the loan portfolios of banks, both in terms of number and value.

"There was a concentration of large value frauds, with the top 50 credit-related frauds constituting 76% of the total amount reported as frauds during 2019-20. Incidents relating to other areas of banking, like off-balance sheet and forex transactions, fell in 2019-20," said RBI.

Of the total, public sector banks accounted for 80 percent of the Rs 1.85 trillion worth of frauds, while private banks accounted for 18 percent.

"Weak implementation of early warning signals (EWS) by banks, non-detection of EWS during internal audits, non-cooperation of borrowers during forensic audits, inconclusive audit reports and lack of decision making in joint lenders' meetings account for delay in detection of frauds," said the report.