 "CG Power financial fraud: Four entities, two deals and high-value loans")
Bank frauds have sharply come down on an annual basis to Rs 5,244 crore in the first three quarters of this fiscal on account of improved detection and reporting, Minister of State for Finance Anurag Thakur said in Rajya Sabha on Tuesday.
Bank frauds reduced significantly from Rs 38,548 crore in the 2016-17 fiscal to Rs 16,084 crore in 2017-18 fiscal.
Frauds rose slightly to Rs 18,893 crore in 2018-19 but started declining again to Rs 5,244 crore in the first three quarters of 2019-20 fiscal, he said during Question Hour.
"Bank frauds, which stood at 0.58 per cent during 2009-14, have come down to 0.16 percent in the last two and half years. In the first six months of this year, frauds were only 0.04 per cent. This has happened because our government has taken right steps towards fraud reporting and detection," Thakur said in the Upper House.
A declining trend in bank frauds is observed in respect of public sector banks (PSBs) as well with the amount involved by year of occurrence of fraud reducing sharply, he said.
It reduced from Rs 35,578 crore in 2,043 cases in 2016-17 to Rs 12,234 crore in 1,949 cases in 2017-18, increasing slightly to Rs 15,575 crore in 1,250 cases in 2018-19, and declining again to Rs 3,781 crore in 436 cases in the first three quarters of 2019-20 fiscal, he added.
To check frauds, the minister said, "We came out with a framework for improved detection and monitoring. We also reviewed the quality of assets, cleaned up the bank balance, and recapitalised banks."
To a supplementary query by Congress member Motilal Vora if the government has arrested anyone involved in fraud, the minister said, "The member has shown right concern. But frauds took place in cases of loan that were sanctioned during that time (2009-14)."
"Loans were taken at that time and frauds were of that time. When our government came to power, we brought the Fugitive Economic Offenders Act for attaching assets of offenders who ran away and stayed abroad," he said.
The government also came out with the Insolvency and Bankruptcy Code (IBC) through which about Rs 4 lakh crore has been recovered so far, he added.
Responding to another member Narendra Jadhav (Nominated)'s query why the government has not created a separate agency for monitoring banking frauds, the minister said, "We need to note the year of occurence and we started reporting now. We have made many changes in the banking sector and reforms will continue in future."
To Shiv Sena member Anil Desai's query whether reports of National Financial Services Authority match with declining trend of frauds shared by the government, the minister reiterated the government has taken various steps to bring in more accountability and transparency in the system.
"At the same time, we look at various reports of regulators and other authorities also," he said.
He also mentioned that regulator RBI in its Financial Stability Report of December 2019 has observed that the systematic and comprehensive checking, including of legacy stock of non-performing assets (NPAs) of PSBs for frauds under the framework has helped unearth frauds perpetrated over a number of years.
With regard to frauds with banks on account of digital transactions, the RBI has informed that it does not collect data on frauds under the category Digital Transaction, while making available data on fraud as reported by Scheduled Commercial Banks (SCBs) and select Financial Institutions (FIs) for amount involving Rs 1 lakh and above, he added.
