A number of measures being taken to control and prevent frauds in banks, including, inter alia, the following:
Government has issued “Framework for timely detection, reporting, investigation etc. relating to large value bank frauds” to Public Sector Banks (PSBs), which provides, inter-alia, that
Fugitive Economic Offenders Act, 2018 has been enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. It provides for attachment of property of a fugitive economic offender, confiscation of such offender’s property and disentitlement of the offender from defending any civil claim.
Central Fraud Registry (CFR), based on Fraud Monitoring Returns filed by banks and select financial institutions, has been set up by RBI as a searchable online central database for use by banks.
For enforcement of auditing standards and ensuring the quality of audits Government has initiated establishment of National Financial Reporting Authority as an independent regulator.
PSBs have been instructed to—
As per the Reserve Bank of India (RBI), Scheduled Commercial Banks (SCBs) report cases of fraud where the amount involved is above Rs. 1 lakh to RBI. Frauds reported over the last three financial years and current financial year (till 30.9.2018) are at Annexure.
Annexure
Frauds (amount involved Rs. 1 lakh and above) reported by Scheduled Commercial Banks over the last three financial years and current financial year (till 30.9.2018)
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* Fraud data is by the year of |
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reportingand not the year of |
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Amount |
occurrence of the fraud or |
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Number |
sanction of loan, Letter of |
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involved |
Undertakingetc., which may be |
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Year of reporting of fraud |
of frauds |
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(in crore |
of an earlier period. E.g., the |
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reported* |
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Rs.)* |
fraud in PNB’s Brady House |
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branch was reported in |
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February2018 but is a |
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continuingfraud since 2011. |
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2015-16 |
4,693 |
18,699 |
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2016-17 |
5,076 |
23,934 |
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2017-18 |
5,917 |
41,168 |
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2018-19 |
3,416 |
30,420 |
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(up to 30.9.2018) |
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Source: RBI |
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This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written Reply to a Question in Lok Sabha Today.
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DSM/RM/KA