By Dr. Gyan Pathak
Number of Bank frauds in 2022-23 in India reached 13,576 as against just 4306 in 2013-14, and has even broken the record of the last year in only first six months of the current financial year 2023-24 when the fraud cases have already risen to 14,483. Obviously, UPA government was no match to the NDA government led by PM Narendra Modi in banking frauds, though PM Narendra Modi has promised during his election campaigns that he would give a corruption free India.
Nevertheless, the Reserve Bank of India’s Report on Trend and Progress of Banking in India 2022-23, released on December 27 shows that the number of frauds prior to 2020-21on the basis of date of occurrence reached to 9,621 involving Rs 1,71,985 crore. In 2020-21 alone the number of frauds were 5,590, which rose to 7,659 in 2021-22, and 13,576 in 2022-23 involving the value of fraud Rs 11,828 crore, Rs 6,953 crore, and Rs 2,146 crore respectively.
On the basis of date of reporting number of frauds were 7,263 in 2020-21, which rose to 9,053 in 2021-22, and 13,576 in 2022-23, involving Rs 1,18,417 crore, 45,598 crore, and Rs 26,632 crore.
All these show that number of banking frauds went on rising despite assurance of the Modi government that they have been taking appropriate actions to eliminate banking frauds in the country, nevertheless, the assurance given by the government to make banks and the country free from frauds and corruption.
As for the money fleeced in the banking frauds, in has been also on the rise. In the year 2011-12, a total of Rs 4,497 crore were swindled, which rose to Rs 18,491 crore in 2015-16, and peaked to 1,66,576 crore prior to 2019-20, and Rs 1,71,985 crore prior to 2020-21.
PM Narendra Modi government was severely criticised for such an unprecedented rise in the bank frauds. The entire Banking Sector of India was reported to have been undergoing the worst crisis in the last two decades, and the rising frauds were believed to be the real culprit. However, the Modi government put the blame of the banking crisis on the earlier governments led by opposition political parties, most of which are now in the INDIA alliance.
Nevertheless, the data shows that after an unprecedented rise in the value of bank frauds, it could be brought down as per data collected on the basis of reporting to only Rs1,18,417 crore in 2020-21, and further to Rs45,598 crore in 2021-22. In the year 2022-23, the amount involved further came down to Rs26,632, which was still much higher than Rs4,497 crore in 2011-12.
However, the RBI report says, “During 2022-23, the total amount of frauds reported by banks declined to a six-year low while the average amount involved in frauds was the lowest in a decade.” Further it stated that in the first half of the 2023-24, although the number of frauds reported rose over the corresponding period a year ago, the amount involved was only 14.9 per cent of the previous year’s amount.
It must be noted that during the first half of 2022-23 (April-September) the number for frauds were only 5,396 which rose to 14,483 in the first half of the current fiscal 2023-24, but the amount involved were respectively Rs 17,685 crore and Rs 2,642 crore. Since the date is based on the date of reporting, the final data may change.
It is also worth noting that number of frauds cases are concentrated in card on internet related frauds during 2022-23. The number of fraud cases reported by PVBs accounted for 66.2 per cent of the total. However, in terms of amount involved, PSBs had a higher share, which is a major cause of concern. While the majority of the frauds in PSBs were related to advances, PVBs accounted for a majority of card/internet and cash-related cases.
On the basis of date of occurrence, out of 9,621 total number frauds prior to 2020-21, the largest 7,530 number of frauds were in advances. In value of the fraud, out of Rs 1,71,985 crore, a total of Rs 1,69,225 crore were given by banks as advances. The value of frauds in advances has declined to Rs 10,660 crore in 2020-21 and Rs 6,469 crore in 2021-22. However, after a decline in frauds in advances it again rose to Rs 1,094 crore in 2022-23.
Data collected on the basis of reporting shows that out of 7,263 frauds in 2020-21, a total of 3,401 were frauds in advances involving Rs 1,17,018 crore out of Rs 1,18,417 crore total fraud. In 2021-22, out of total 9,053 frauds a total of 3,789 were frauds in advances involving Rs 43,512 crore out of Rs 45,598 crore. Similar was the case in 2022-23, out of fraud of Rs 26,632 crore, a total of Rs 25,177 crore was in advances.
The frauds in advances indicate corruption in the banking system that facilitated frauds. This, of course, has led to sharp rise in the amount of non-performing assets in the Indian Banking System, and the subsequent write-offs to big-borrowers and corporates. During the Modi regime since 2014-15, written off NPAs appears to be above Rs 15 lakh crores, that the government resorted to clean balance sheets of the public sector banks. (IPA Service)
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