Fraud In Bank Beyond Control

PSU banks detect frauds worth over 5.2K cr during Apr-Sept AGENCIES: NEW DELHI, DEC 14 2012, 20:28 IST

New Delhi: More than 1,700 fraud cases involving over Rs 5,200 crore were detected in the state-owned banks during the first six months of this fiscal, government said today.

Union Bank of India reported fraud amounting to Rs 656.26 crore, followed by Punjab National Bank (Rs 619.86 crore), Bank of India (Rs 473.45 crore), State Bank of Hyderabad (Rs 429.31 crore), and State Bank of India (Rs 376.97 crore). In all, 28 banks reported these frauds.

As per the data provided by Minister of State for Finance Namo Narain Meena in a written reply in the Lok Sabha, 1,714 cases of frauds were reported in public sector banks in the first half (April-Sept) of the financial year 2012-13. The amount involved in the frauds totalled Rs 5,210.56 crore.

In 2011-12, state owned banks had reported 3,392 frauds involving Rs 4,025.3 crore.

Meena further said that 12,252 employees of public sector banks have been probed in fraud cases since 2009-10 till September 30, 2012.

To another reply, he said that PSU banks have detected home loan scams amounting to Rs 55.4 crore in the first nine months of 2012.

As per the data, there were frauds in the housing loan segment to the tune of Rs 6.77 crore in the Syndicate Bank, followed by Corporation Bank (Rs 6.03 crore) and Allahabad Bank (Rs 4.40 crore) till September 30, 2012.

In all, 288 such banking frauds had taken place till September 30.

During 2011, the amount involved in home loan scams was Rs 180.52 crore crore. There were 596 such incidents in PSBs.

Meena said banks probe staff accountability and their involvement in all the fraud cases. On the completion of the investigation, the commensurate punishment is awarded to the delinquent employees, he added.

In another reply, the minister said Debts Recovery Tribunals (DRTs) disposed of 7,792 cases related to dues of banks and financial institutions involving Rs 13,575 crore till October during this year.

DRTs had disposed of 12,122 cases involving Rs 21,155 crore in 2011.

In yet another answer, Meena said that the ratio of Gross Non-Performing Assets (GNPAs) to Gross Advances in Scheduled Commercial Banks increased from 2.36 per cent in March 2011 to 2.94 per cent in March 2012 and further to 3.57 per cent in September 2012.

http://www.financialexpress.com/news/psu-banks-detect-frauds-worth-over-5.2k-cr-during-aprsept/1045397/2

Banks lost Rs 4,448 crore to fraud in 2011-12

The amount was lost in 5,569 incidents reported by Indian banks, FM tells house

Devjyot Goshal & N Sundaresha Subramanian / New Delhi Dec 13, 2012, 18:26 IST Indian banks have lost a whopping Rs 4,448 crore to frauds in the last financial year. The revelation by the finance minister came in response to a parliament query. “As per Reserve Bank of India’s (RBI) record, the incidents of frauds reported by the banks during FY2011-12 was 5569 cases involving an amount of Rs 4,448 crore,” the minister said in a statement in response to a query by member Sanjay Raut.  Citing RBI,  the statement said, major frauds included misuse of loans sanctioned for purposes other than those for which these are sanctioned, lack of proper due diligence by the banks and direct sales agents (DSA), fake title deeds submitted as collateral security and disposal of assets created by loans without the knowledge of the bank. In some cases, “ the banks had not carried out the pre sanction inspection of property for the acquisition of which the loan was being sanctioned to ascertain if the unit/ property really existed.” There were also instances where the borrowers fooled the banks by submitting fake documents related to Know Your customer compliance and could not be found at the given addresses after the realease of the loan amount. Banks also succumbed to fake and fabricated financial statements and salary slips that showed an “improved financial position of the borrowers.” Detailing the steps taken by RBI, the minister’s statement said, “Reserve Bank of india has issued detailed instructions vide master circular dated July 1, 2012, on Frauds- classification and reporting” containing all the details/ aspects relating to frauds.” On receipt of fraud reports from banks, various aspects related to frauds are examined and concerned banks are advised to report the case to CBI/police/ Serious Fraud Investigation Office (SFIO). Banks are also advised to  examine staff accountability, complete proceedings against erring staff expeditiously, take steps to recover the amount involved in the fraud, claim insurance wherever applicable and streamline the system and also procedures so that frauds do not recur, the statement said. Despite these efforts the size of bank frauds have been growing consistently. In August, CBI chief AP Singh had put the amount of bank frauds in 2010-11 at Rs 3,799 crore, a growth of 53 Per cent over Rs 2017 crore frauds recorded in 2009-10. Speaking at a annual conference of chief vigilance officers of banks, Singh had said that the CBI is developing a Bank Case Information System (BCIS) which contains names of accused, borrowers and public servants in its records. "This information may also be made accessible to field functionaries of the banking sector in collaboration with the Indian Bank Association (IBA) once modalities are worked out," he had said.  RBI had in the past asked banks to put in place concurrent audit systems, constitute fraud monitoring committees to monitor frauds etc, the FM’s statement said. http://business-standard.com/india/news/banks-lost-rs-4448-crore-to-fraud-in-2011-12/199462/on