The Reserve Bank of India said that 6,801 cases of fraud were reported by scheduled commercial banks and select financial institutions involving an amount of £7.15 billion in the last fiscal (increase of over 73 per cent in the fraud amount). In the last 11 fiscal years, a total of 53,334 cases of fraud were reported by banks involving a massive amount of £20.5 billion, the central bank said in reply to an RTI query.
During 2008-09, a total of 4,372 cases were reported involving an amount of £186 million. In 2009-10, £199.89 million worth fraud was reported in 4,669 cases. A total of 4,534 and 4,093 such cases were reported in 2010-11 and 2011-12 involving £381.57 million and £450.11 million, respectively.
In the 2012-13 fiscal, 4,235 fraud cases involving £859 were reported by banks as against 4,306 cases (involving £1.01 billion) in 2013-14 and 4,639 cases (involving £1.94 billion) in 2014-15, the RBI said. As many as 4,693 and 5,076 cases of fraud were reported in 2015-16 and 2016-17 involving £1.86 billion and £2.39 billion, respectively, it said.
“Cases of fraud reported to RBI are required to be filed by banks as criminal complaints with law enforcement agencies. The information in respect of action being taken or already taken is not available readily,” RBI said. The data assumes significance as banks are grappling with high-profile fraud cases involving absconding billionaire Nirav Modi and liquor baron Vijay Mallya, among others.
The large-scale fraud had prompted anti-corruption watchdog Central Vigilance Commission (CVC) to do an analysis and it came out with a report on top 100 frauds. The analysis focussed on the modus operandi, amount involved, type of lending (consortium or individual), anomalies observed, loopholes that facilitated perpetration of the fraud concerned and the systemic improvement required to plug the gaps in the system and procedures.
The frauds were classified and analysed for 13 sectors, including gem and jewellery, manufacturing and industry, agriculture, media, aviation, service and project, discounting of cheques, trading, information technology, export business, fixed deposits, demand loan and letter of comfort. The measures suggested by the CVC included strengthening standard operating procedures (SOPs) and the monitoring system, among others.
The CBI in 2018 booked top officials of two public sector banks, a former CMD of IDBI Bank, former Aircel promoter C Sivasankaran, his son and companies controlled by him in connection with a £60 million loan fraud in the IDBI. The investigative agency named 15 bank officials who worked at senior levels at the IDBI in 2010 and 2014 when loans were sanctioned to companies controlled by Sivasankaran, in its FIR registered on a complaint from the CVC.
Managing Director and CEO of Indian Bank, Kishor Kharat (who was then MD and CEO of IDBI Bank) and his counterpart in Syndicate Bank, Melwyn Rego (then deputy managing director in IDBI Bank) along with then Chairman-cum-Managing Director of IDBI Bank M S Raghavan, have been named in the latest FIR filed by the CBI. Central agencies like the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) are also probing big-ticket bank fraud cases.