Banking fraud at 18,000 crore

Unsettling! Domestic banking sector reports losses due to bank fraud at a staggering Rs. 18,000 crore for 2016-17


India’s Domestic Banking industry reported a staggering loss of about Rs. 18,000 crore for the previous fiscal, attributable mostly to banking frauds. State Bank of Maharashtra gained the dubious distinction of being hit the hardest in terms of number of cases due to loan and bank frauds.

The sector reported a whopping 12, 553 cases of banking fraud, with the total loss standing at Rs. 18,170 crore for the 2016-17 fiscal year. Frauds have been quite rampant in the banking sector at least in the recent past, with PNB being the latest victim of a massive 12,000 crore bank fraud courtesy of diamantaires Nirav Modi and Mehul Choksi.

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While Bank of Maharashtra was the most hit with frauds 3,893 cases of bank fraud, private sector lending giant ICICI bank took the second place with reported fraud cases standing at 3,359. Another private sector giant HDFC bank, which has the second market capitalisation among banks in India, stood at number three with 2,319 cases of bank fraud being reported.

As for the quantum of individual amounts, Punjab National Bank took the biggest hit, with frauds causing losses to the tune of Rs. 2,810 crore for the last financial year. PNB was followed by Bank of India that reported losses to the tune of Rs. 2,770 crore and SBI that reported losses at 2,420 crore.

While banking fraud has indubitably come to haunt the country’s domestic banking sector, fairly newer players including IDBI Bank, DCB Bank and Dhanalaxmi Bank were able to cushion losses to bank fraud, with the percentage of fraud to assets being as less as 0.01% for the fiscal year 2016-2017. Other banks that took top positions in terms of amounts lost and number of cases, had a fraud to asset percentage of close to 1% or higher. Bank of Maharashtra, for instance, clocked a percentage of 1.02%.


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