Lok Sabha Question No. 1795 (UNSTARRED), answered on 2017-03-10
Subject: Frauds in Banks
Ministry: FINANCE
Asked by: SATYA PAL SINGH, SANJAY SHAMRAO DHOTRE, NISHIKANT  DUBEY, RAHUL RAMESH SHEWALE

## GOVERNMENT OF INDIA

## MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO 1795

TO BE ANSWERED ON THE MARCH, 2017 PHALGUNA 19, 1938 SAKA 10TH

## Frauds in Banks

1795. DR: SATYAPAL SINGH:

SHRI SANJAY DHOTRE:

SHRI NISHIKANT DUBEY:

SHRI RAHUL SHEWALE:

Will the Minister of FINANCE be pleased to state:

- (a) whether the cases of frauds in Banks have increased and if so, the details thereof, bankwise;
- (b) whether the Government has developed any mechanism to detect fraud in banks before its reporting by the customers of the banks and if so, the details thereof along with the number of such frauds detected by the banks during each of the last three years and the current year, bank-wise;
- (c) whether the bank employees have been found involved in such cases during the said period and if SO, the details thereof;, bank-wise along with the action taken by the Governmentlrespective bank against employees; and such
- (d) the corrective steps taken by the Government in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

(a) to (d): Information provided by Reserve Bank of India (RBI) for the last three years and the current year; bank-wise providing numbers and amount involved in fraud cases of Rs. 1 lakh and above, including those where staff is involved is Annexed.

RBI has issued Master Direction on "Frauds Classification and reporting' vide RBI: DBS.CFMC.BC.No.1/23.04.001/2016-17 dated July 01, 2016 containing all the detailslaspects  relating to frauds. To compress the time taken in detection a framework for handling loan frauds has been in place\_ Objective of this framework is to direct the focus of banks on the aspects relating to prevention, early detection, prompt reporting to the RBI and the investigative agencies (for instituting criminal proceedings against the fraudulent borrowers) and timely initiation of the staff accountability proceedings. The framework also seeks to stipulate time lines with the action incumbent on a bank: Further; the framework has also prohibited banks from extending bank finance to borrowers who have defaulted and also committed a fraud for five years from the date of full payment of the defrauded amount. On receipt of fraud reports from banks, various aspects related to the frauds are examined and concerned banks are advised to report the case to Central Bureau Policel Serious Fraud  Investigation Office examine staff accountability , complete proceedings against the erring staff expeditiously, take steps to recover the amount involved in the fraud, claim insurance wherever applicable and streamline the system as also procedures so that frauds do not recur. put

Whenever a complaint against a bank official(s) is received and any irregularities are found or observed on the of Banks' official (s), the Banks initiate action as per their extant rules and commensurate punishment is awarded to the delinquent employees based on the seriousness of the wrongdoings as per Bank's disciplinary rules. part

#***

| Bank Name                                     | No: of Frauds   | 2013-14 (1) Amount involved in Lakh   | No of Cases wherein staff is involved   | No: of Frauds   | 2014-15 (2) Amount involved in Lakh   | No:of Cases wherein staff Is involved   | Frauds Lakh   | 2015-16 (3) No. of Amount Cases involved In wherein staff is   | Amount No: of involved in Frauds  Lakh   | June, Sept & Dec Quarters 2016 (4)   | No:of Cases wherein staff is involved   | No: of Frauds   | Total (1+2+3+4) Amount involved in Lakh   | No: of Cases wherein involved   |
|-----------------------------------------------|-----------------|---------------------------------------|-----------------------------------------|-----------------|---------------------------------------|-----------------------------------------|---------------|----------------------------------------------------------------|------------------------------------------|--------------------------------------|-----------------------------------------|-----------------|-------------------------------------------|---------------------------------|
| Abu Dhabi Commercial Bank PJSC                |                 | 51                                    |                                         |                 | 6.91                                  |                                         |               | linvolved 2488.94                                              |                                          |                                      |                                         |                 |                                           |                                 |
| Allahabad Bank                                | 95              | 61805.97                              | 16                                      |                 | 7597.64                               |                                         | 23            | 29090.8                                                        |                                          | 15791.33                             |                                         | 202             | 114285.74                                 | 36                              |
| American Express Banking Corp                 |                 |                                       |                                         |                 |                                       |                                         |               |                                                                |                                          |                                      |                                         |                 |                                           |                                 |
|                                               | 218             | 2121.99                               |                                         | 1761            | 1007.51                               |                                         | 187           | 641.83                                                         | 124                                      | 453.75                               |                                         | 705             | 4225.08                                   | 2                               |
| Andhra Bank                                   | 38              | 21430.33                              |                                         | 52              | 51148.11                              | 13                                      | 44            | 25045.92                                                       | 48                                       | 13962.36                             |                                         | 182             | 111586.72                                 | 34                              |
| Axis Bank Ltd,                                | 193             | 47374.34                              | 27                                      | 187             | 33713.54                              | 46                                      | 227           | 33836.39                                                       | 189                                      | 199849.41                            | 35                                      | 796             | 314773.68                                 | 145                             |
| Bandhan Bank Ltd.                             |                 |                                       |                                         |                 |                                       |                                         |               | 11.55                                                          | 10                                       | 101.79                               | 10                                      |                 | 113.34                                    | 11                              |
| Bank of America, National Association         |                 | 10.5                                  | 0                                       |                 |                                       |                                         |               |                                                                |                                          |                                      |                                         |                 | 10.5                                      |                                 |
| Bank of Baroda                                | 204             | 45315.68                              | 19                                      | 303             | 122602.38                             | 29                                      | 255           | 166810                                                         | 176                                      | 30225.47                             |                                         | 938             | 364953.53                                 | 98                              |
| Bank of India                                 | 100             | 22690.28                              | 18                                      | 131             | 9244.37                               | 20                                      | 156           | 121757.56                                                      | 124                                      | 146499.38                            |                                         | 511             | 300191.59                                 | 63                              |
| Bank of Maharashtra                           | 33              | 2153.52                               | 12                                      | 50              | 23905.6                               |                                         | 45            | 130773.15                                                      | 54                                       | 36894.62                             | 10                                      | 182             | 193726.89                                 |                                 |
| Bank of Nova Scotia                           |                 |                                       |                                         |                 |                                       |                                         |               |                                                                |                                          | 13                                   |                                         |                 | 13                                        |                                 |
| Barclays Bank Plc                             |                 | 123.84                                |                                         |                 |                                       |                                         |               |                                                                |                                          |                                      |                                         |                 | 123.84                                    |                                 |
| Bharatiya Mahila Bank Ltd.                    |                 |                                       |                                         |                 |                                       |                                         |               |                                                                |                                          | 54.77                                |                                         |                 | 54.77                                     |                                 |
| Canara Bank                                   |                 | 18029.56                              |                                         | 114             | 17563.19                              | 15                                      | 94            | 158977.98                                                      |                                          | 50142.94                             |                                         | 380             | 244713.67                                 |                                 |
| Capital Local Area Bank Ltd                   |                 |                                       |                                         |                 | 18.2                                  |                                         |               |                                                                |                                          |                                      |                                         |                 | 18.2                                      |                                 |
| Catholic Syrian Bank Ltd:                     |                 | 2582.29                               |                                         |                 | 179.45                                |                                         |               | 917.09                                                         | 18                                       | 1410.89                              |                                         | 45              | 5089.72                                   |                                 |
| Central Bank of India                         | 156             | 82328.52                              |                                         | 214             | 214971.8                              | 27                                      | 167           |                                                                | 120                                      | 47650.74                             | 19                                      | 657             | 362680.61                                 | 89                              |
| Citibank NA                                   | 101             | 1307.15                               |                                         | 94              | 848.88                                |                                         | 115           | 510.51                                                         | 150                                      | 912.34                               |                                         | 460             | 3578.88                                   |                                 |
| City Union Bank Ltd,                          |                 | 226.57                                |                                         |                 | 644.19                                |                                         |               | 1208.67                                                        |                                          | 2257.93                              |                                         | 13              | 4337.36                                   |                                 |
| Corporation Bank                              |                 | 27827.82                              |                                         | 73              | 122209.34                             |                                         | 1351          | 132199.37                                                      | 69                                       | 53620.28                             |                                         | 354             | 335856.81                                 |                                 |
| CTBC Bank                                     |                 | 475                                   |                                         |                 | 11165.25                              |                                         |               | 2000                                                           |                                          |                                      |                                         |                 | 13640.25                                  |                                 |
| DBS Bank Limited                              |                 | 14356.17                              |                                         |                 | 3442.41                               |                                         |               | 7111.53                                                        |                                          | 8.19                                 |                                         | 10              | 24918.29                                  |                                 |
| DCB Bank Ltd                                  |                 | 29.861                                |                                         | 2               | 4.08                                  |                                         | 14            | 459.351                                                        |                                          |                                      |                                         | 24              |                                           |                                 |
| Dena Bank                                     | 36              | 16280.99                              |                                         |                 | 40015.93                              |                                         | 21            | 7102.43                                                        |                                          | 37142.2                              |                                         | 130             | 100541.55                                 | 18                              |
| Deutsche Bank Asia                            | 2               | 13.69                                 |                                         |                 |                                       |                                         |               | 1.5                                                            |                                          |                                      |                                         |                 | 30.44                                     |                                 |
| Dhanlaxmi Bank Limited                        | 15              | 6320.46                               |                                         |                 | 7284.13                               |                                         |               | 556.12                                                         |                                          | 9085.09                              |                                         | 32              | 23245.8                                   | 13                              |
| Doha Bank Qsc                                 |                 |                                       |                                         |                 |                                       |                                         |               |                                                                |                                          | 897.94                               |                                         |                 | 897.94                                    |                                 |
| Equitas Small Finance Bank Limited            |                 |                                       |                                         |                 |                                       |                                         |               |                                                                |                                          | 201.52                               |                                         |                 | 201.52                                    | 2                               |
|                                               |                 | 10000                                 |                                         |                 |                                       |                                         |               |                                                                |                                          | 10878.83                             |                                         |                 | 34353.13                                  |                                 |
| EXPORT-IMPORT BANK OF INDIA Federal Bank Ltd, | 37              | 957.32                                |                                         | 44              | 8173.99                               |                                         | 49 8199.81    |                                                                | 52                                       | 14482.18                             |                                         | 182             | 31813.3                                   | 32                              |
| FIRSTRAND BANK HDFC Bank Ltd_                 | 164             |                                       |                                         |                 |                                       |                                         |               |                                                                |                                          |                                      | 21                                      | 879             | 1.67                                      |                                 |
| Hongkong & Shanghai Banking Corporation       | 116             | 1525.96                               | 12                                      | 218             | 1753.29                               |                                         | 260           | 9728.98                                                        | 237                                      | 15170.6                              | 49                                      | 215             | 28178.83 19328.91                         | 101                             |
|                                               |                 |                                       |                                         | 38              | 2645.75                               |                                         | 36            | 8611.77                                                        | 25                                       | 54.22                                |                                         |                 |                                           |                                 |
| HSBC Bank Oman SAO.G                          |                 |                                       |                                         |                 | 32.91                                 |                                         |               |                                                                |                                          |                                      |                                         |                 |                                           |                                 |
|                                               | 485             |                                       | 34                                      | 433             | 26977.16                              | 52                                      | 588           | 34767.52                                                       | 455                                      | 39606.                               | 25                                      | 1961            | 177657.03                                 | 177 19                          |
| IIDBI Bank Limited                            | 92              | 62554.16                              |                                         | 561             | 55795.                                |                                         | 129           | 26205.31                                                       | 84                                       | 97873.4                              |                                         | 361             |                                           |                                 |

| IDFC Bank Limited                           |        |                  |    |        |           |    |     |                    |       |       | 24              |    |          | 24                  |     |
|---------------------------------------------|--------|------------------|----|--------|-----------|----|-----|--------------------|-------|-------|-----------------|----|----------|---------------------|-----|
| IFCI LTD.                                   |        |                  |    |        | 9818.32   |    |     |                    |       |       | 21486.1 -       |    |          | 56640.57            |     |
| (Indian Bank                                | 54     | 4348.64          | 17 | 951    | 9103.97   | 14 | 87  | 13805.59           | 23    | 64    | 45667.91        |    |          | 72926.11            | 59  |
| Indian Overseas Bank                        | 125    | 48473.44         | 36 | 138    | 57564.11  |    | 109 | 59832.95           | 14    | 87    | 125771.09       | 26 | 459      | 291641.59           | 91  |
| Induslnd Bank Ltd,                          | 27     | 2963.63          | 12 | 14     | 13340.82  |    | 21  | 528.               |       | 16    | 233.39          |    | 78       | 17066.74            | 33  |
| ING Vysya Bank Ltd                          | 14     | 3958.47          |    | 35     | 619.22    |    |     |                    |       |       |                 |    | 49       | 4577.69             |     |
| Jammu & Kashmir Bank Ltd.                   |        | 662.01           | 3  |        | 90286.68  |    | 14  | 866.55             |       | 13    | 23969.751       |    | 41       | 115784.99           |     |
| Karnataka Bank Ltd.                         | 21     | 1548.11          |    | 22     | 2212.52   |    | 15  | 9195.72            |       | 19    | 3009.16         |    |          | 15965.51            |     |
| Karur Vysya Bank Ltd_                       |        | 148.57           |    | 16     | 12316.22  |    | 21  | 18243.28           |       |       | 1736.02         |    | 66       |                     |     |
| Korea Exchange Bank                         |        |                  |    |        |           |    |     |                    |       |       |                 |    | 2        | 2.28                |     |
| Kotak Mahindra Bank Ltd:                    | 80     | 11527.95         |    | 56     | 5896.64   |    | 114 | 4502.13            |       | 98    | 10707.35        | 10 | 348      | 32634.07            | 23  |
| Krishna Bhima Samruddhi Local Area Bank Ltd |        |                  |    |        | 1.02      |    |     |                    |       |       |                 |    |          | 1.02                |     |
| Lakshmi Vilas Bank Ltd:                     |        | 7072.67          |    |        | 5449.3    |    | 12  | 2201.14            |       |       | 7923.87         | 2  | 27       | 22646.98            |     |
| Mashreq Bank PSC                            |        |                  |    |        |           |    |     | 3.66               |       |       |                 |    |          | 3.66                |     |
| Nainital Bank Ltd,                          |        | 80.07            |    |        | 55.23     |    | 21  | 187.81             |       |       | 35.91           |    | 33       | 359.02              |     |
| Oriental Bank of Commerce                   |        | 5352.37          |    | 127    | 76483.75  |    | 114 | 80729.58           |       |       | 14683.44        |    | 380      | 177249.14           | 21  |
| PT Bank Maybank Indonesia TBK               |        |                  |    |        |           |    |     |                    |       |       | 1778.18         |    |          | 1778.18             |     |
| Punjab & Sind Bank                          | 29     | 6967.19          |    | 30     | 3916.14   |    | 12  | 13193.85           |       | 13    | 17598.25        |    | 84       | 41675.43            |     |
| Punjab National Bank                        | 239    | 55838.25         | 20 | 180    | 230973.13 | 13 | 131 | 35285.231          |       | 114   | 225034.43       | 10 | 664      | 547131.04           |     |
| RBL Bank Ltd,                               |        | 1518.561         |    | 15     | 905       |    | 10  | 383.54             |       | 10    | 59.35           |    | 40       |                     |     |
| SBM Bank (Mauritius) Ltd                    |        | 4631.02          |    |        |           |    |     |                    |       |       |                 |    |          |                     |     |
| Shinhan Bank                                |        |                  |    |        |           |    |     | 584.161            |       |       |                 |    |          | 584.16              |     |
| SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA  |        | 674.13           |    |        | 1109.28   |    |     | 4531.851           |       |       | 1130.86         |    | 18       | 7446.12             |     |
| South Indian Bank Ltd.                      | 20     | 1151.4           |    |        | 1707.47   |    |     | 158.22             |       |       | 31396.29        |    | 43       |                     |     |
| Standard Chartered Bank                     | 104    | 48028.37         |    | 81     | 8737.96   |    | 127 | 366.03             |       | 244   |                 |    | 556      | 57653.98            | 14  |
| State Bank of Bikaner & Jaipur:             | 43     | 14892.93         |    | 41     | 46213.43  |    | 48  | 14772.93           |       | 31    |                 |    | 163      | 89086.71            | 20  |
| State Bank of Hyderabad                     | 27     | 36508.4          | 10 | 31     | 6865.38   |    | 34  | 67366              |       | 26    | 9599.21         |    | 118      | 120339.69           | 40  |
| State Bank of India                         | 549    | 90697.79         | 94 | 651    | 161854.03 | 98 | 562 | 188797.46          | 66    | 429   | 223681.64       |    | 2191     | 665030.92           | 322 |
| State Bank of Mysore                        | 20     | 9282.68          |    | 97     | 9074.73   |    | 67  | 2172.85            |       | 84    | 23821.89        |    | 268      | 44352.15            | 18  |
| State Bank of Patiala                       | 40     | 9885.16          |    | 39     | 29030.32  |    | 40  | 41319.88           |       | 32    | 2920.34         |    | 151      | 83155.              | 12  |
| State Bank of Travancore                    | 33     |                  | 16 | 34     | 23623.31  |    | 19  | 13888.03           |       | 41    | 5378.37         |    | 127      |                     | 29  |
| Syndicate Bank                              | 102    | 13271.8          | 19 | 208    | 79310.45  | 30 | 176 | 164055             |       | 122   | 19895.13        | 13 | 608      | 276532.48           | 761 |
| Tamilnad Mercantile Bank Ltd                | 27     | 5230.11          |    | 21     | 1262.8    |    | 12  | 572.14/            |       |       | 5256.42         |    |          | 12321.47            |     |
| The Bank of Tokyo Mitsubishi UFJ, Ltd.      |        |                  |    |        |           |    |     |                    |       |       | 123.961         |    |          | 123.96              |     |
| The Royal Bank of Scotland NV.              |        | 41.41            |    |        | 19.48     |    |     | 10.04              |       |       |                 |    | 20       | 71.93               |     |
| UCO Bank Union Bank of India                | 56     | 36424.06 9209.21 |    | 87 111 | 36982.69  | 18 | 85  | 24814.88           | 44 12 | 50 74 | 58080.18 43106. | 13 | 278 4161 | 260416.84 219071.54 | 43  |
| United Bank of India                        | 85 125 | 34897.95         |    | 128    | 68035.15  |    | 146 | 129772.94 14266.71 |       | 27 48 | 8312.04         |    | 347      | 125511.85           | 17  |
| Vijaya Bank                                 | 59     | 6187.44          | 13 | 35     |           |    | 21  | 10465.4            |       |       | 3552.42         |    | 163      | 55379.61            | 21  |
| Yes Bank Ltd                                | 12     |                  |    |        | 58.26     |    | 10  | 154.               |       |       | 78.51           |    | 31       | 2027.81             |     |

Srand Tota

4690

450

17504