₹1.13 lakh crore fraud cases reported in 1st half of FY20: Sitharaman

Finance Minister Nirmala Sitharaman told the Parliament on Monday (February 3) banks and select financial institutions reported frauds involving ₹1,13,374 crore in the first half of the current financial year.

She said, in a written reply in the Lok Sabha, the government had in 2015 issued “Framework for timely detection, reporting, investigation relating to large value bank frauds” for public sector banks to deal with suspected frauds involving sums of money in excess of ₹50 crore. It had also instituted wide-ranging structural and procedural reforms through the framework and other steps to check fraudulent banking practices.

She said systematic and comprehensive checking, including legacy stock of PSBs’ non-banking assets (NPAs), for frauds under the framework has been taken note of by the Reserve Bank of India (RBI) in its Financial Stability Report in December 2019, where it has observed that this has helped unearth frauds perpetrated over a number of years.

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“This is reflected in the increased amount involved in frauds of ₹1 lakh and above, reported by scheduled commercial banks and select financial institutions, from ₹23,934 crore in the financial year 2016-17 to ₹41,167 crore in 2017-18, ₹71,543 crore in 2018-19, and ₹1,13,374 crore in the first half of the current financial year,” she said.

The minister further said that while improved “detection” and “reporting” has increased the reported amount involved in recent years, the comprehensive steps taken to check bank frauds have resulted in the amount involved by year of occurrence of fraud showing a declining trend.

She said amount involved in frauds that took place in the reporting year reduced sharply from ₹38,548 crore in 2016-17 to ₹16,084 crore in 2017-18, increased slightly to ₹18,893 crore in 2018-19, and declined again to ₹3,010 crore in the first half of the current financial year.

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Sitharaman said that primarily, as a result of transparent recognition of stressed assets as NPAs, gross NPAs of PSBs, as per RBI data on global operations, rose from ₹2,79,016 crore as on March 31, 2015, to ₹6,84,732 crore as on March 31, 2017, and ₹8,95,601 crore as on March 31, 2018.

She said as a result of the government’s strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of PSBs have since declined by ₹1,68,305 crore to ₹7,27,296 crore as on September 30, 2019.

(With inputs from agencies)