Lok Sabha Question No. 150 (UNSTARRED), answered on 2018-02-02
Subject: Fraud Cases in Banks
Ministry: FINANCE
Asked by: SUPRIYA SADANAND SULE, VIJAYSINH MOHITE PATIL, P.R. SUNDARAM, DHANANJAY BHIMRAO MAHADIK, JAYAKUMAR JAYAVARDHAN, RAJEEV SHANKARRAO SATAV, HEENA VIJAYKUMAR GAVIT

## GOVERNMENT  OF INDIA MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES LOK SABHA

## UNSTARRED QUESTION NO. 150

Fraud Cases in Banks

TO BE ANSWERED  ON THE 2 ND  February  2018/ Magha  13, 1939 (SAKA)

150.   SHRIMATI SUPRIYA  SULE:

SHRI MOHITE PATIL VIJAYSINH  SHANKARRAO:

SHRI P.R. SUNDARAM:

SHRI DHANANJAY  MAHADIK:

DR. J. JAYAVARDHAN:

SHRI SATAV  RAJEEV:

DR. HEENA VIJAYKUMAR  GAVIT:

Will  the Minister  of FINANCE  be pleased to state:

- (a) the details  of Public  Sector  Banks  (PSBs) earning  profit/incurring losses during  each of the last three  years,  bank  and State/UT-wise;
- (b) whether  loss incurred  by  PSBs is due to increase  in the incidents  of frauds in the said banks;
- (c) if  so,  the  details   thereof   along   with   the  number   of  fraud   cases  detected   and  the  action   taken against  the officials/banks  during  the said period,  bank  and State-wise;
- (d) whether   the  Government   has  developed   any   mechanism   to  detect  fraud   in  banks   before  it  is reported  by  the customers  of the banks,  if so, the details  thereof;
- (e) whether  the number  of fraud cases involving  bank  officials is  very  less in  private  banks  compared to PSBs, if so, the details  thereof  and the reasons  therefor;  and
- (f) the effective  measures  taken/being  taken  by  the Government  to stop frauds in banks?

## ANSWER

The Minister  of State in the Ministry  of Finance (SHRI SHIV PRATAP  SHUKLA)

- (a) to (c):  The details  of Public  Sector  Banks  (PSBs) earning  profit  / incurring  losses during  each of the last three  years,  and the number  of fraud cases, as furnished  by  the Reserve  Bank of India (RBI), are at Annexure-I.  The bank-wise  details  of action  taken  against  delinquent  employees  during  January  2015 to March 2017,  as  furnished   by   RBI,  are  at  Annexure-II.   RBI  has  apprised   that   these  details   are  not maintained  State/UT-wise.  Losses incurred  by  PSBs are primarily because of provisioning  on account  of high Non-Performing  Assets (NPAs).
- (d):    RBI has issued directions  to banks  on frauds classification  and reporting  covering  all aspects/details regarding  reporting  of frauds.
- (e): The  number   of  fraud  cases  in  private   sector  banks vis-a-vis PSBs  over  the  last  three   years   as furnished  by  RBI is at Annexure-III.  However,  keeping  in view  that  PSBs have about  70% market  share, the incidence  of such frauds in private  sector  banks  is higher  than  in PSBs.
- (f):      RBI has taken  many  steps to monitor  and prevent  fraud,  such as new  framework  for dealing  with loan frauds and Red Flagged Accounts,  launch  of Central  Fraud  Registry  in January  2016, issuance  of guidelines  to prevent  skimming  of ATM/Debit/Credit Cards,  and legal  audit  of title  documents  in respect of large  value  loan  accounts.

## Annexure-I

## Lok Sabha USQ No. 150  for  2.2.2018,  regarding  'Fraud Cases in Banks' Bank-wise Data on Frauds reported  during  FY 2014-15  to FY 2016-17

Amount in  crore  Rs.

| Bank Name               | 2014-15          | 2014-15               | 2015-16          | 2015-16               | 2017-18          | 2017-18               |
|-------------------------|------------------|-----------------------|------------------|-----------------------|------------------|-----------------------|
|                         | Net Profit/ Loss | Number of fraud cases | Net Profit/ Loss | Number of fraud cases | Net Profit/ Loss | Number of fraud cases |
| AllahabadBank           | 621              | 47                    | -743             | 23                    | -314             | 60                    |
| AndhraBank              | 638              | 52                    | 540              | 44                    | 174              | 64                    |
| Bank ofBaroda           | 3,398            | 303                   | -5,396           | 255                   | 1,383            | 224                   |
| Bank ofIndia            | 2,564            | 131                   | -6,089           | 156                   | -1,558           | 162                   |
| Bank ofMaharashtra      | 451              | 50                    | 101              | 45                    | -1,373           | 75                    |
| CanaraBank              | 6,950            | 114                   | -2,813           | 94                    | 1,122            | 119                   |
| CentralBankof India     | 606              | 214                   | -1,418           | 167                   | -2,439           | 146                   |
| Corporation Bank        | 584              | 73                    | -506             | 135                   | 561              | 83                    |
| DenaBank                | 265              | 41                    | -935             | 21                    | -864             | 43                    |
| IDBI BankLimited        | 873              | 56                    | -3,665           | 129                   | -5,158           | 107                   |
| IndianBank              | 1,005            | 95                    | 711              | 87                    | 1,406            | 79                    |
| IndianOverseasBank      | -454             | 138                   | -2,897           | 109                   | -3,417           | 95                    |
| OrientalBankof Commerce | 497              | 127                   | 156              | 114                   | -1,094           | 56                    |
| Punjab&SindBank         | 121              | 30                    | 336              | 12                    | 201              | 16                    |
| PunjabNationalBank      | 3,062            | 180                   | -3,974           | 131                   | 1,325            | 160                   |
| UCOBank                 | 1,138            | 87                    | -2,799           | 85                    | -1,851           | 59                    |
| UnionBankof India       | 1,782            | 111                   | 1,352            | 146                   | 555              | 111                   |
| UnitedBank ofIndia      | 256              | 128                   | -282             | 67                    | 220              | 30                    |
| SyndicateBank           | 4,936            | 208                   | -1,643           | 178                   | 359              | 166                   |
| StateBank ofIndia       | 15,970           | 893                   | 11,589           | 770                   | -1,383           | 803                   |
| VijayaBank              | 447              | 35                    | 382              | 21                    | 750              | 58                    |

Annexure  -II Lok Sabha USQ No. 150  for  2.2.2018,  regarding  'Fraud cases  in Banks' Statement  showing action taken by  Public Sector Banks against  delinquent   employees

for their  involvement  in cases  of frauds and corrupt  practices

2017

Note: Action  taken  includes  employees  convicted,  awarded  major/ minor  penalties  including dismissed/ discharged/  removed  from service.

| Sl. No.   | Bank                       | 2015 (Jan- Dec)   | 2016 (Jan- Dec)   |   2017 (Jan- Mar) |
|-----------|----------------------------|-------------------|-------------------|-------------------|
| 1         | StateBank ofIndia          | 888               | 547               |               103 |
| 2         | StateBank ofHyderabad      | 67                | 78                |                48 |
| 3         | StateBank ofMysore         | 36                | 17                |                 4 |
| 4         | StateBank ofPatiala        | 26                | 38                |                 4 |
| 5         | StateBank ofTravancore     | 98                | 129               |                45 |
| 6         | StateBank ofBikaner&Jaipur | 11                | 12                |                 5 |
| 7         | Bank ofBaroda              | 21                | 39                |                 9 |
| 8         | AllahabadBank              | 121               | 76                |                 7 |
| 9         | Bank ofIndia               | 19                | 20                |                 0 |
| 10        | Bank ofMaharashtra         | 0                 | 33                |                 9 |
| 11        | CanaraBank                 | 28                | 39                |                 4 |
| 12        | DenaBank                   | 85                | 39                |                 9 |
| 13        | IndianBank                 | 15                | 34                |                 7 |
| 14        | IndianOverseasBank         | 245               | 160               |                44 |
| 15        | CentralBank ofIndia        | 248               | 130               |                28 |
| 16        | UnionBank ofIndia          | 125               | 72                |                17 |
| 17        | PunjabNationalBank         | 115               | 58                |                11 |
| 18        | UnitedBank ofIndia         | 73                | 42                |                26 |
| 19        | UCOBank                    | 78                | 53                |                 7 |
| 20        | SyndicateBank              | 92                | 105               |                 0 |
| 21        | Andhra Bank                | 119               | 84                |                16 |
| 22        | Corporation Bank           | 10                | 28                |                 9 |
| 23        | OrientalBankof Commerce    | 77                | 74                |                27 |
| 24        | Punjab&SindBank            | 43                | 27                |                 3 |
| 25        | VijayaBank                 | 10                | 4                 |                 0 |
| 26        | BharatiyaMahilaBank Ltd.   | 0                 | 0                 |                 0 |
| 27        | IDBI Bank Limited          | 98                | 56                |                16 |
|           | Total                      | 2,748             | 1,994             |               458 |

1.Source: VMR III returns submitted by public sector banks to RBI. No such reporting arrangement exists for private sector banks (Including foreign banks).

2.Action taken includes employees convicted, awarded major/ minor penalties including dismissed/ discharged/

removed from service

.

## Annexure-III

## Lok Sabha USQ No. 150  for  2.2.2018,  regarding  'Fraud Cases in Banks'

|                     | 2014-15 to 2016-17   | 2014-15 to 2016-17         |
|---------------------|----------------------|----------------------------|
|                     | NumberofFrauds       | Frauds wherestaff involved |
| Public Sector Banks | 8,622                | 1,146                      |
| PrivateSector Banks | 4,156                | 568                        |