Banks lost Rs 41,168 crore in FY18, 72% higher than last year
Frauds in the banking sector surged sharply by 72% year-on-year (y-o-y) in FY18.
Frauds in the banking sector surged sharply by 72% year-on-year (y-o-y) in FY18. The amount involved in bank frauds increased to Rs 41,168 crore against Rs 23,934 crore in FY17, according to Reserve Bank of India (RBI) report titled ‘Trend and Progress of Banking in India’.
The number of fraud cases in the same period increased to 5,917, against 5,076 in FY17.
The report said frauds have emerged as the most serious concern in the management of operational risk, with 90% of them located in the credit portfolio of banks. However, frauds related to off-balance sheet operations, foreign exchange transactions, deposit accounts, and cyber-activity have taken the center stage.
Off-balance sheet frauds soared y-o-y to Rs 16,288 crore against Rs 63.3 crore reported FY17. Cyber frauds jumped 159% to Rs 110 crore against Rs 42 crore. Frauds in advances jumped 9.7% to Rs 22,559 crore against Rs 20,561 crore.
Deposit frauds declined by 49% to Rs 457 crore against Rs 903 crore, foreign exchange transaction frauds were also down by 35% to Rs 1,426 crore against Rs 2,201 crore.
“Frauds in the banking sector increased sharply in FY18 mainly reflecting a large value case in the jewelry sector. Incidentally, large-value frauds involving `50 crore and above constituted about 80% of all the frauds during the year. 93% of the frauds in terms of the amount of more than Rs 1 lakh occurred in public sector banks, while private sector banks accounted for 6%.
The report explained the modus operandi of large value frauds involves opening current accounts with banks outside the lending consortium without a no-objection certificate from lenders, deficient and fraudulent services/certification by third-party entities, diversion of funds by borrowers through various means, including through associated/shell companies, lapses in credit underwriting standards and failing to identify early warning signals.
Best Commodity Daily Market News, Click Here Watch More News- Ripples Advisory, Get 2 Days Free Trial or See Stock Cash Services. "Focus on all moments - big and small"
0 comments
Note: only a member of this blog may post a comment.