23,000 Loan Fraud Cases Of Rs 1 Lakh Crore Reported In Last 5 Years: RBI In RTI Reply

The Logical Indian Crew

May 4th, 2018 / 5:21 PM

Image credit: Patrika

In a shocking RTI reply, the Reserve Bank of India (RBI) said that over 23,000 cases of fraud involving Rs 1 lakh crore have been reported in the past five years in various banks. According to India Today, a total of 5,152 cases of fraud were reported in banks from April 2017 to March 1, 2018. This is a huge leap from the cases in 2016-17 when the banks had reported 5,076 cases of fraud involving Rs 23,933 crore. Loan frauds refer to cases where the borrower does not repay the loan and intentionally tries to deceive the lending bank.

The central bank said in a reply that the highest ever amount of Rs 28,459 crore is said to have been involved in these cases of fraud reported from April 2017 to March 1, 2018. From 2013 to March 1, 2018,  23,866 cases of fraud, of Rs 1 lakh or above in each case, were reported. According to the RTI, a total of Rs 1,00,718 crore was involved in all the cases put together.

Responding to these reports, the RBI said, “The reported fraud cases are processed, and action is taken according to the facts and circumstances of individual cases,”

The New Indian Express suggests that while the number of cases reported grew at an average rate of 4.6% in the five years between 2014 and 2018, the amount involved grew averaging 16.4% during the same period. The increase in the amounts has been sharp in the last two years, at 18% and 19% in 2017 and 2018, respectively.

India’s biggest fraud ever is the Rs 13,000-crore fraud at the country’s second-largest public sector lender, Punjab National Bank (PNB), perpetrated by jeweller Nirav Modi and the promoter of Gitanjali Gems Mehul Choksi, who is also his uncle.

As per reports, latest to come under the CBI probe is Kishor Kharat, the former MD and CEO of IDBI Bank, and Melwyn Rego the former deputy MD of IDBI Bank, Kharat is currently the head of Indian Bank, and Rego is the chief of Syndicate Bank. MS Raghavan, the former CMD of IDBI, too was named in the FIR filed by the CBI relating to the Rs 600-crore loan fraud case at IDBI. As of December 2017, the combined NPAs of all banks stood at Rs 8.4 lakh crore.

State Bank of India which is considered to be India’s biggest lender reported 1,069 loan fraud cases in the last five financial years but did not disclose the amount, according to Business Standard. These data show PNB topped the list with 389 cases totalling Rs 65.62 billion ($1.03 billion) over the last five years, followed by Bank of Baroda, with Rs 44.73 billion from 389 cases and Bank of India coming in third, with loan frauds totalling Rs 40.5 billion from 231 cases.

The RBI has asked Indian banks to disclose its bad loans fully, to speed up their recovery and stop hiding fraud cases as NPAs. The RBI has, at the same time, also been criticised for being too guarded about publicly sharing data on these fraudulent loans. This can be attributed to legal constraints of disclosing individual cases thereby discouraging investors that might lead to the pummeling of affected banks, making loan recovery even harder.


Also published on Medium.


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Written by : Bindiya (Intern)

Edited by : Pooja Chaudhuri

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