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Last Updated : Aug 29, 2019 07:18 PM IST | Source: Moneycontrol.com

Bank fraud affected funds worth Rs 71,543 crore in FY19: RBI annual report

Number of frauds related to advances were predominant followed by card/internet related frauds and deposits related frauds, the report said. Frauds relating to card/internet and deposits constituted only 0.3 percent of the total value of frauds in FY19.

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The number of cases of frauds reported by banks went up by 15 percent on a year-on-year basis from 2018-19, according to the RBI’s annual report for FY19.

The banking sector reported 6,801 frauds in FY19, which led to a loss Rs 71,542.93 crore as against 5,916 cases involving Rs 41,167.04 crore reported in FY18.

FY 19 saw Public sector banks (PSBs) having reported 3,766 cases of fraud worth Rs 64,509.43 crore as against 2,885 cases involving Rs 38,260.8 crore.

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Among bank groups, PSBs, which constitute the largest market share in bank lending, have accounted for the bulk of frauds reported in 2018-19. It was followed by private sector banks and foreign banks.

"The average lag for large frauds, i.e. Rs 100 crore and above, amounting to Rs 52,200 crore reported during 2018-19, was 55 months," it said.

In terms of area of operations, frauds related to advances constituted the preponderant share of the total amount involved in frauds in 2018-19, while the share of frauds in off-balance sheet items declined from a year ago.

Number of frauds related to advances were predominant followed by card/internet related frauds and deposits related frauds, the report said.

Frauds relating to card/internet and deposits constituted only 0.3 percent of the total value of frauds in FY19.

Cheating and forgery was the major component, followed by misappropriation and criminal breach of trust. Fraud cases involving an amount of less than 1 lakh (i.e., small value frauds) were only 0.1 percent of the total amount involved in 2018-19, the report showed.

To improve the fraud risk management framework for banks, the apex bank will revise the master directions on frauds to incorporate new instructions in the light of experience gained, will conduct workshops on frauds for the bankers based on comprehensive reviews, to sensitise them on fraud prevention, prompt/ accurate reporting and follow up action.

With regard to the cleaning up of the stressed balance sheets of banks, the RBI also noted in its annual report that after certain teething issues, the insolvency and bankruptcy code (IBC) is proving to be a game changer and that the recovery of stressed assets have also improved.

 

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First Published on Aug 29, 2019 07:18 pm
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