SBI, Allahabad Bank worst hit by frauds; nearly 2,500 cases rock PSU banks in Q1

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Published: November 26, 2019 12:03:53 PM

In only three months to June this year, 2,480 cases of bank frauds, involving a total amount of Rs 31,898.64 crore were reported by the PSU banks.

psb, psu banks, public sector banks, bank frauds, rajya sabha, rbi, reserve bank of indiaAllahabad Bank topped the list of banks where its own staff was involved in the fraud cases. 

While the recent PMC Bank fraud case took depositors by surprise for its audacity and the dire fallout, the scam is just one of many such cases PSU banks in India are fraught with. PSU banks such as State Bank of India reported 2,480 cases of frauds, involving a total amount of Rs 31,898.64 crore, and all this in just the April-June quarter. Out of all those cases reported, 104 frauds worth Rs 89.37 crore took place during the same quarter. “Occurrence of frauds was enabled by lack of discipline in the financial system and lax credit culture,” Anurag Thakur, MoS, Ministry of Finance, said in a reply to a question in Rajya Sabha.

He added that earlier, credit culture and discipline in the financial system were lax across various stakeholders and the role of bankers too was also not as rigorously examined earlier. The minister also said that through extensive reforms, change in credit culture has been instituted and discipline tightened for every stakeholder in the financial system which has enabled a decline in the occurrence of frauds.

Also Read: PSU market share continues to fall despite govt’s efforts of revival; Coal India, ONGC among losers

During April-June 2019, the maximum frauds were reported by the State Bank of India, followed by Allahabad Bank, Central Bank of India, and Punjab National Bank. SBI was hit by 1,197 fraud cases, involving an amount of over Rs 12,000 crore. Also, Allahabad Bank topped the list of banks where its own staff was involved in the fraud cases.  In 87 fraud cases in Allahabad Bank, its own staff was involved.

Also Read: INTERVIEW | India faces most corporate frauds in South Asia; these reasons make the country vulnerable

Meanwhile, in the clarification of a large number of bank frauds detected in the recent past, Anurag Thakur said that systematic and comprehensive checking of legacy stock of NPAs of PSU banks for frauds has helped to unearth frauds perpetrated over a number of years, which is getting reflected in increased number of reported incidents of frauds in recent years compared to previous years.

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