In the Reserve Bank of India (RBI) annual report 2019, the apex bank said that frauds reported by banks increased by 15 per cent on a year-on-year basis in 2018-19. The amount involved increased by a significant 73.8 per cent to Rs 52,200 crore - although most of this amount related to erstwhile occurrences. "The number of cases of frauds reported by banks increased by 15 per cent in 2018-19 on a year-on-year basis, with the amount involved rising by 73.8 per cent, though mostly related to occurrences in earlier years," the report mentioned.
The report further highlighted that the average lag between the date of occurrence and its detection by the banks was 22 months. It also added that for large frauds of Rs 100 crore and above, the average lag was 55 months. "The average lag for large frauds, i.e. Rs 100 crore and above, amounting to Rs 52,200 crore reported during 2018-19, was 55 months," the report adds.
The RBI stated that public-sector banks accounted for the bulk of frauds. "Among bank groups, PSBs, which constitute largest market share in bank lending, have accounted for the bulk of frauds reported in 2018-19. It was followed by private sector banks and foreign banks," the RBI annual report stated.
"In terms of area of operations, frauds related to advances constituted the preponderant share of the total amount involved in frauds in 2018-19, while the share of frauds in off-balance sheet items declined from a year ago. In terms of the number of frauds too, those related to advances were predominant followed by card/internet related frauds and deposits related frauds. Frauds relating to card/internet and deposits constituted only 0.3 per cent of the total value of frauds in 2018-19," the report stated.
Furthermore, the RBI annual report stated that cheating and forgery was the major mode of frauds, followed by misappropriation and criminal breach of trust.