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Massive jump in bank frauds! Banks lost this much to frauds in fiscal 2017-18, shows RBI data

Interestingly, 93% of the fraud cases worth over Rs 1 lakh were reported by PSU banks, while private banks accounted for just 6% of the total cases.

UPI app, UPI app user loses Rs 6.8 lakh from SBI account, phishing, financial fraud, SIM card cloning
Various ingenious attempts are being made by fraudsters to fraudently transfer funds available in bank accounts.

Frauds in Indian banking system rose 72% in the financial year 2017-18 as the fraudsters looted a whopping Rs 41,167.7 crore from the banks as against Rs 23,933 crore in the year-ago period, according to latest data by the Reserve Bank of India (RBI). This happened despite stringent monitoring and vigilance by banks. However, the rise in fraud cases is also due to Rs 13,000-crore Punjab National Bank (PNB) fraud case, involving diamantaires Nirav Modi and his maternal uncle and partner Mehul Choksi.

“In terms of amount, frauds in the banking sector increased sharply in 2017-18, mainly reflecting a large value case in the jewellery sector,” the RBI said. Instances of fraud in banks have been increasing over the past four years as the amount looted in the last fiscal is four times higher than Rs 10,170 crore in fiscal 2013-14, The Indian Express reported.

Interestingly, 93% of the fraud cases worth over Rs 1 lakh were reported by PSU banks, while private banks accounted for just 6% of the total cases. Besides, large-value frauds involving Rs 50 crore and above accounted for nearly 80% of all the frauds reported last fiscal.

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In the last financial year, a total of 5,917 cases of bank fraud were registered as against 5,076 cases in the previous financial year. Frauds related to foreign exchange transactions, deposit accounts, off-balance sheet operations and cyber-activity took centre stage. However, cyber frauds are on rise as the banks lost Rs 109.6 during the financial year 2017-18 in 2,059 cases from Rs 42.3 crore with 1,372 cases in the year-ago period.

Earlier this year, the apex bank had asked the Indian Banks Association (IBA) to start working on using enhanced user-friendly, IT-enabled, web-based TPE reporting and disseminating infrastructure with required data security and control measures. Also, the central bank asked lenders to work on strengthening operational controls in a time-bound manner, in a view of the cases related to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, including the PNB case.

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