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Financial frauds drop 32% to Rs 6,735 crore in FY19

Banks and select financial institutions reported to RBI that frauds of Rs 1 lakh and above amounting to Rs 25,884 crore occurred during 2016-17 .

ET Bureau|
Updated: Jun 26, 2019, 10.14 AM IST
The amount involved in such frauds in 2017-18 and 2018-19 stood at Rs 9,866 crore and Rs 6,735 crore, respectively.
NEW DELHI: Banks and select financial institutions reported fraud worth Rs 6,735 crore in the last fiscal, as compared with Rs 9,886 crore in the corresponding period in FY 2017-18.

In reply to a question in Rajya Sabha, finance minister provided details of the amount involved in frauds of Rs 1 lakh and above. In 2016-17, due to Nirav Modi scam the fraud amount was at Rs 25,884 crore.

“Comprehensive measures have been taken to tighten fraud prevention systems and deter perpetration of frauds in banks,” the ministry noted in its statement adding that the government has already directed state run banks to examine all non-performing assets (NPAs) exceeding Rs 50 crore from the angle of possible fraud, and place a report before the bank’s committee for review of NPAs on the findings of this investigation.

“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. In order to bring transparency and accountability in the larger financial system, bank accounts of 3.38 lakh inoperative companies were frozen over the last two financial years,” it said.


In a separate statement, the finance ministry said that asset quality has improved as reflected in 45% year-on-year reduction in slippage into NPAs in FY 2018-19, and 63% reduction in 31 to 90 days overdue corporate accounts by March 2019 from their peak in June 2017.

“With stress recognition largely completed, significant headway in recovery and resolution under IBC, and reduced slippages as a result of improved underwriting and monitoring, gross NPAs of PSBs have started declining,” it said noting that bad loans have declined by Rs 89,189 crore from Rs 8.96 lakh crore in March 2018 to Rs 8.06 lakh crore in March 2019.

The ministry further noted that with substantial cleaning up, accompanied by recapitalisation of banks, credit growth of PSBs has picked up substantially, from 0.78% year-on-year in FY 2016-17 to 7.51% in FY 2018-19.

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