Frauds reported at banks, financial institutions fall by 25% in FY21: RBI – Business Standard

and other financial institutions (FIs) have reported 7,363 frauds in 2020-21, down 15 per cent from the previous year (2019-20), numbers released by the (RBI) in its annual report for 2020-21 showed. Last year, and FIs reported 8,703 frauds. In value terms, these institutions, have reported frauds to the tune of Rs 1.38 trillion in 2020-21, down 25 per cent from the previous year, where the amount involved in frauds was to the tune of Rs 1.85 trillion.

The above data is in respect of frauds of Rs 1 lakh and above reported during the period. It is important to note that the RBI has changed its accounting year to April-March from July-June earlier, hence, this annual report only covers the nine months data (July 2020- March 2021).

In the previous financial year (2019-20), the total fraud cases involving Rs 1 lakh and above, reported by and financial institutions (FIs), increased by 28 percent in volume terms and 159 percent in value terms.

Data suggests, the share of public sector banks in frauds, both in terms of number and the amount involved, has fallen in 2020-21. Meanwhile, the share of private banks in frauds went up in terms of the number of frauds and the amount involved in such frauds.

Furthermore, RBI data suggests mostly frauds are occurring in the loan portfolio of the financial institutions. In 2020-21, the loan portfolio saw 47.5 per cent of the frauds in terms of number and 99 per cent of the amount involved in frauds came from the loan portfolio.

“Though the value of frauds reported in the advances category for 2020- 21, in percentage terms, remained almost the same as compared to the last year, the incidence of frauds in the advances category, in terms of number, has come down over the previous year,” RBI said in its annual report.

Also, the share of the off-balance sheet (in terms of value) has been decreasing since 2018-19.

“The average time lag between the date of occurrence of frauds and the date of detection was 23 months for the frauds reported in 2020-21. However, in respect of large frauds of Rs 100 crore and above, the average lag was 57 months for the same period,” RBI said.

A few days ago, it was reported that cumulatively, banks in India have reported fraud of Rs 4.92 trillion as of March 31, 2021, which represents nearly 4.5 per cent of the total bank credit, showed (RBI) data, which was sought under the Right to Information (RTI) Act by Saurabh Pandhare. The data showed 90 banks and financial institutions reported a total of 45,613 cases of loan fraud till March 31, 2021.

Also, RBI said, compared with the previous year, there was an increase of 31.3 per cent in counterfeit notes detected in the denomination of Rs 500. However, there was a decline in counterfeit notes detected in other denominations.

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