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Avantha Group’s Gautam Thapar arrested, here’s what data on bank frauds reveal

Share of private sector banks in total frauds registered has increased while that of public sector banks has decreased over a year, RBI data show.

August 04, 2021 / 03:37 PM IST
Representative image

Representative image

Bank fraud related news are making headlines: the arrest of Avantha Group promoter Gautam Thapar in connection with the Yes Bank fraud case on August 3; Ambience Mall owner Raj Singh Gehlot arrested in bank fraud case worth Rs 200 crore on July 29; an estimated Rs 100-crore Karuvannur Co-operative Bank scam unearthed in Kerala, reported by Moneycontrol on July 22.

Frauds of Rs 500 crore and above reported by public sector banks/ Indian banks (except foreign banks)/select financial institutions have seen a drop: 79 cases in 2019-20, 73 cases in 2020-21 and 13 cases in 2021-22 (up to June 30, 2021), according to a reply given in the Rajya Sabha on July 27.

Likewise, data by the Reserve Bank of India, released in its annual report on May 27, indicates a similar trend: reported bank frauds have fallen over a year; however, the share of private sector banks in total frauds registered has increased while that of public sector banks has decreased.

Bank Fraud By Cases Bank Fraud By Value

Share of frauds (in numbers) by private sector banks has increased from 35 percent in 2019-20 to 50 percent in 2020-21, while in value it has increased from 18 percent to 33.5 percent over the same period. On the contrary, share of PSBs in total frauds has dropped from 79.9 percent to 59 percent over the one year period in terms of value.


Overall, frauds have reported a 15 percent decline from 8,703 cases reported in 2019-20 to 7,363 cases in 2020-21 while in terms of value, frauds have dropped by 25 percent, from Rs 1,85,468 crore to Rs 1,38,422 over the corresponding period.

In addition to the measures adopted by the government and the apex bank to curb incidence of frauds, the other possible reason for the drop or fall in reported cases could be limited operations during the last financial year because of the pandemic and lockdown.

Frauds have been mostly occurring in the loan/advances category in terms of area of operations. In 2020-21, 99 percent of frauds (in value) were reported under advances amounting to Rs 1,37,023 crore, followed by off-balance sheet (Rs 535 crore) and deposits (Rs 434 crore).

In terms of numbers, 3,501 cases of fraud were reported under advances in 2020-21 down from 4,608 in the previous year.

The average time lag between the date of occurrence of frauds and the date of detection was 23 months for the frauds reported in 2020-21, the RBI report highlighted. However, the average lag was 57 months for frauds of Rs 100 crore and above.
Chaitanya Mallapur is a Research Analyst at Moneycontrol
first published: Aug 4, 2021 03:37 pm

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