Bank Frauds Decline To Rs 648 Cr In FY22 From Over 61,000 In FY17: Minister Told Lok Sabha

NEW DELHI: Bank frauds over the last five years have decreased dramatically, falling to as low as Rs 648 crore in the first nine months of 2021-22. This decline is attributed to structural and procedural reforms aimed at reducing such incidences, Parliament was informed on Monday.

Bank frauds totalled Rs 61,229 crore in 2016-17, fell to Rs 11,583 crore in 2020-21, and then to Rs 648 crore from April to December 2021-22, according to Minister of State for Finance Bhagwat Karad in a written reply to the Lok Sabha.

Improved identification and reporting, combined with extensive processes, resulted in a dramatic decrease in such frauds, he claimed.

The RBI issued master guidelines on frauds in 2016, he said, adding that the government has implemented extensive structural and procedural reforms to combat bank fraud.

Such rigorous and thorough examination of frauds, including the legacy stock of non-performing assets (NPAs), resulted in the discovery of long-standing frauds.

While systematic and extensive checking has resulted in a rise in the annual reported amount involved in frauds, it has also resulted in a substantial decrease in the occurrence of such scams.

Karad stated that extensive actions had been taken to combat bank fraud, including resolving security holes and ensuring that such cases are thoroughly investigated.

According to him, the RBI issued a circular to all banks in 2018 requiring them to implement security and operational controls such as a straight-through process between the bank’s core banking solution or accounting system and the SWIFT messaging system, enable time-based restrictions in SWIFT, and review logs at regular intervals.

“The Financial Cyber Fraud Reporting and Management System module has been made operational by the Indian Cyber Crime Coordination Centre, functioning under the Ministry of Home Affairs, for quick reporting of financial crimes and to stop criminals syphoning off funds,” Karad added.

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