Frauds reported by PSBs decline to Rs 3,204 cr in FY22: MoS Finance

The amount involved in fraud cases reported by public sector banks (PSBs) has come down to Rs 3,204 crore in the last fiscal from Rs 28,884 crore in 2017-18, Parliament was informed on Tuesday.

As per the RBI data, PSBs reported 5,624 cases of fraud in 2017-18, involving Rs 28,884 crore. In 2018-19, a total of 9,092 cases were reported amounting to Rs 26,720 crore, while in 2019-20, the number of frauds rose to 11,074, involving a monetary value of Rs 21,170 crore, Minister of State for Finance Bhagwad Karad said in a written reply to the Rajya Sabha.

In 2020-21, PSBs reported 4,680 fraud cases of Rs 7,306 crore, which declined to 2,369 cases corresponding to Rs 3,204 crore in 2021-22, he added.

Karad said an online searchable database of frauds reported by banks has been set up in the form of the Central Fraud Registry.

It has enabled timely identification, control and mitigation of fraud risk and also to carry out due diligence during the credit sanction process, he said.

Various steps have been taken by the RBI in fraud detection, such as issuing directions to banks on prompt reporting of such cases, reporting deficient third-party services and implementation of security and operational controls by banks.

The minister said the government, in 2015, issued a framework for banks for timely detection, reporting, and investigation relating to large-value bank frauds involving money in excess of Rs 50 crore.

"Public Sector Banks (PSBs) have been advised to strictly ensure rotational transfer of officials/employees," Karad said.

In a separate question on the profitability of PSBs, the minister said their net profit increased to Rs 66,519 crore in 2021-22 against Rs 31,820 crore in 2020-21.

The gross NPAs (non-performing assets) of these banks fell to Rs 5,41,750 crore from Rs 6,16,616 crore in 2020-21, Karad said.

"Profit earned and retained by banks adds to their capital and enables them to support further loan growth while maintaining required capital adequacy ratios. In addition, banks raise capital from the market to strengthen their capital base," the minister said in his reply.

Providing data, Karad said capital raised by the PSBs from the market in the form of both equity and bonds in FY22 stood at Rs 50,719 crore.

It stood at Rs 58,697 crore in 2020-21 and Rs 32,293 crore in 2019-20.