Mumbai: Banks reported a total fraud of Rs 71,543 crore in 2018-19, a 74 per cent rise as against Rs 41,167 crore in the previous financial year with state owned banks accounting for a bulk of these frauds according to the Reserve Bank of India’s report titled Trends and Progress of Banking 2018-19.
The number of fraud cases reported by lenders also jumped to 6,801 in 2018-19, compared to 5,916 cases in 2017-18.
“Public sector banks accounted for a bulk of frauds reported in 2018-19 — 55.4 per cent of the number of cases reported and 90.2 per cent of the amount involved — mainly reflecting the lack of adequate internal processes, people and systems to tackle operational risks,” said the RBI report.
“Private sector banks and foreign banks shares in the former stood at 30.7 per cent and 11.2 per cent, whereas their shares in the latter were 7.7 per cent and 1.3 per cent, respectively. PSBs’ share in the value of large frauds was even higher at 91.6 per cent in 2018-19,” said the report.
In February 2018, the government issued a framework for timely detection, reporting and investigation relating to frauds in PSBs, which required them to evaluate NPA accounts exceeding Rs 50 crore from the angle of possible frauds, to supplement the earlier efforts to unearth fraudulent transactions. This appears to have caused the sharp jump in reported frauds in 2018-19 said the report.
Meanwhile the central bank said the health of the banking system has improved with the gross non-performing loan ratio remaining stable at 9.1 per cent as of September-end, the same level as in FY19.
However, the numbers indicate major improvement on a full-year basis, as in FY18 the ratio stood at a high of 11.2 per cent and slipped to 9.1 per cent in FY19, the RBI said.
It said the improveme-nt in asset quality was driven by state-run lend-ers which saw a drop both in both GNPA and in the net NPA ratios....