These two key steps helped Modi government to bring down banking frauds

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Published: June 5, 2019 1:14:31 PM

Responding to reports of a sharp rise in bank frauds, the government on Tuesday said that data on frauds banks reported to the RBI is by year of reporting and not occurrence, as against in many cases of the previous period.

Rupee Coop Bank, Rupee bank, RBI, indian banks, npa, bad loans, Reserve Bank of India, Board of Administrators Rupee Bank , Rupee Bank CEO, Rupee Bank chairmanThe laxity in the financial system has been systematically dealt with through comprehensive banking reforms, the government said.

Responding to reports of a sharp rise in bank frauds, the government on Tuesday said that data on frauds banks reported to the RBI is by year of reporting and not occurrence, as against in many cases of the previous period. In fact, the government’s proactive measures coupled with banking reforms have led to an increase in detection and reporting of frauds, the finance ministry said in a statement. The laxity in the financial system has been ‘systematically dealt with through comprehensive banking reforms,” the government also said clarifying on the media reports citing recent spike in bank frauds reported to the RBI.

In FY19, the scheduled commercial banks and select financial institutions reported 6,801 frauds of worth Rs 71,542.93, news agency PTI reported citing the the RBI data.. It amounted to an increase of more than 73 percent in the fraud amount. It’s not possible to find out the year wise amount involved in the banking frauds since the data is by the year of reporting and not occurrence, the ministry also said.

Also read: India’s services sector activity growth slips to 12-month low in May amid election disruptions: PMI survey

Citing measures taken to prevent frauds, the Modi government said that timely measures have been taken against the defaulters to bring down such frauds. “Proactive action has been taken against wilful defaulters, with FIRs being registered by PSBs (public sector banks) against 2,881 wilful defaulters,” it said. The public sector banks have also been advised to seek a report on the borrower from the Central Economic Intelligence Bureau for bad loans with worth over Rs 50 crore, it added. With an aim to take on economic offenders, Fugitive Economic Offenders Act, 2018 has also been enacted, it noted. “For enforcement of auditing standards and ensuring the quality of audits, Government has established National Financial Reporting Authority as an independent regulator,” the government said.

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