The deadweight of banking fraud in India: What's the weak link?

Fraud doubled in value to Rs 1.85 trillion in FY20, which is nearly equal to the recapitalisation amount injected into state-run banks during the year

Just when you thought another big fraud like the heist at Punjab National Bank by diamantaires Nirav Modi and Mehul Choksi will not hit the headlines, lands ABG Shipyard with its Rs 22,848-crore mess — the biggest, at that. Fraud spoils the feel-good factor in more ways than one. Apart from eroding customer confidence, fraud affects reputational, operational and business risks.

What’s the weak link? The RBI’s Financial Stability Report of December 2019 tells you that in H1:FY19, state-run banks accounted for 89.8 per cent of fraud by value, followed by private banks at 9.2 per cent, and foreign banks