Lok Sabha Question No. 1802 (UNSTARRED), answered on 2018-07-27
Subject: Fraud and Bungling in Banks and Financial Institutions
Ministry: FINANCE
Asked by: HARI BABU KAMBHAMPATI, RAM KUMAR SHARMA KUSHWAHA, HARI OM PANDEY, E. T. MOHAMMED BASHEER, SANTOSH KUMAR, KAUSHALENDRA KUMAR, MANOJ KUMAR TIWARI

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

## LOK SABHA UNSTARRED QUESTION NO 1802

TO BE ANSWERED ON THE JULY, 2018 (FRIDAY) SHRAVANA 05, 1940 (SAKA) 27TH

## Fraud and Bungling in Banks and Financial Institutions

1802.

DR. KAMBHAMPATI HARIBABU:

SHRI RAM KUMAR SHARMA: SHRI ET MOHAMMED BASHEER: SHRI KAUSHALENDRA KUMAR:

SHRI HARI OM PANDAY:

SHRI SANTOSH KUMAR:

SHRI MANOJ TIWARI:

Will the Minister of FINANCE be pleased to state:

- (a) whether the officialslemployees of various Public Sector Banks(PSBs) and financial institutions have been charged for financial frauds and bungling and if so, the details thereof; banklfinancial institution/State/UT-wise;
- (b) the total number of accused officialslemployees along with the status of inquiry initiated against them during the period of March, 2015 to March 2018, bank, State/UT-wise;
- (c) whether these officials have been suspended from the services for the said charges and if so, the total number of such officials;
- (d) whether the Government/Reserve Bank of India has any mechanism for monitoring of financial frauds in these banks and financial institutions and if so, the details of the nodal agency and officers appointed for this purpose across the country, State/UT-wise; and
- (e) if not, the reasons therefor and the manner in which whistleblower may approach these authorities without the fear of disclosure of their names?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

- (a) to (c): The number of fraud cases provided by Reserve Bank of India, where officialslemployees are involved, banklfinancial institution-wise and State/UT-wise, are given in Annex 1 and Annex 2 respectively.

Whenever any irregularities are found or observed on the part of officialslemployees, the concerned   organisations initiate action as per their extant  regulations and Central Vigilance Commission (CVC) guidelines Commensurate punishment is awarded to the delinquent employees based on the seriousness of the wrongdoings in terms of their disciplinary regulations and with the advice of CVCI Chief Vigilance Officer(CVO):

- (d) & (e): RBI has implemented a fraud reporting and monitoring mechanism for banks and select financial institutions through a Master Direction in terms of which banks are required to report fraud cases to RBI; through an online platform: Further; Central Fraud Registry, a web based searchable database of frauds reported by the banks, containing data for the last 13 years has been made operational by RBI since January, 2016.

Department of Personnel and Training's Resolution No. 89 dated 21st April, 2004, commonly known as Public Interest Disclosure and Protection of Informers Resolution (PIDPI), 2004, envisages a mechanism by which a complainant can blow a whistle by lodging a complaint and also seek protection against his victimization for doing SO. The CVC is the designated agency to receive complaints from whistle blowers under the PIDPI Resolution:

Further amendments, inter-alia, authorised the Chief Vigilance Officer of the Ministries or Departments of Government of India to act as the designated Authority to receive written complaint or disclosure on any allegation of corruption or misuse of office.

Bank-wise data of No. of frauds wherein staff is involved (Amount involved in individual case 81.00 Lakh) reported for last three financial years Public Sector Banks and select Financial Institutions

|                                                     |   2015-16 | 2016-17   | 2017-18   |
|-----------------------------------------------------|-----------|-----------|-----------|
| Allahabad Bank                                      |         5 | 11        | 8         |
| Andhra Bank                                         |         5 | 10        | 8         |
| Bank of Baroda                                      |        33 | 24        | 18        |
| Bank of India                                       |        14 | 15        | 23        |
| Bank of Maharashtra                                 |        12 | 15        | 9         |
| Bhartiya Mahila Bank Ltd.                           |         0 | 0         | 0         |
| Canara Bank                                         |        17 | 25        | 18        |
| Central Bank of India                               |        29 | 27        | 16        |
| Corporation Bank                                    |        36 | 11        | 16        |
| Dena Bank                                           |         1 | 6         | 3         |
| Export Import Bank of India                         |         0 | 0         | 0         |
| IDBI Bank Ltd_                                      |         8 |           | 14        |
| Indian Bank                                         |        23 | 6         | 16        |
| Indian Overseas Bank                                |        14 | 27        | 29        |
| National Bank for Agriculture and Rural Development |         0 | 0         | 0         |
| National Housing_ Bank                              |         0 | 0         | 0         |
| Oriental Bank of Commerce                           |        12 | 9         | 127       |
| Punjab and Sind Bank                                |         1 | 3         | 2         |
| Punjab National Bank                                |        17 | 18        | 29        |
| Small Industries Dev. Bank of India                 |         0 | 0         | 0         |
| State_Bank of Bikaner & Jaipur                      |         5 | 8         |           |
| State Bank of Hyderabad                             |         7 | 9         |           |
| State Bank of India                                 |        66 | 83        | 127       |
| State Bank of Mysore                                |         6 |           | 0         |
| State Bank of Patiala                               |         4 | 6         |           |
| State Bank of Travancore_                           |         6 | 2         | 0         |
| Syndicate Bank                                      |        14 | 19        | 29        |
| The Industrial Finance Corp of India                |         2 | 0         | 1         |
| UCO Bank                                            |        44 | 15        | 5         |
| Union Bank of India                                 |        12 | 4         | 8         |
| United Bank of India                                |         2 | 5         | 1         |
| Vijaya Bank                                         |         0 |           | 2         |
| Grand Total                                         |       395 | 373       | 509       |

## Annex 2

| State-wise data of No. of frauds wherein staff is involved (Amount involved in individual case >=<1.00 Lakh) reported for last three financial years Public Sector Banks and select Financial Institutions   | State-wise data of No. of frauds wherein staff is involved (Amount involved in individual case >=<1.00 Lakh) reported for last three financial years Public Sector Banks and select Financial Institutions   | State-wise data of No. of frauds wherein staff is involved (Amount involved in individual case >=<1.00 Lakh) reported for last three financial years Public Sector Banks and select Financial Institutions   | State-wise data of No. of frauds wherein staff is involved (Amount involved in individual case >=<1.00 Lakh) reported for last three financial years Public Sector Banks and select Financial Institutions   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| State                                                                                                                                                                                                        | 2015-16                                                                                                                                                                                                      | 2016-17                                                                                                                                                                                                      | 2017-18                                                                                                                                                                                                      |
| Andaman & Nicobar Islands                                                                                                                                                                                    | 0                                                                                                                                                                                                            |                                                                                                                                                                                                              | 0                                                                                                                                                                                                            |
| Andhra Pradesh                                                                                                                                                                                               | 31                                                                                                                                                                                                           | 47                                                                                                                                                                                                           | 28                                                                                                                                                                                                           |
| Arunachal Pradesh                                                                                                                                                                                            | 0                                                                                                                                                                                                            | 0                                                                                                                                                                                                            | 1                                                                                                                                                                                                            |
| Assam                                                                                                                                                                                                        | 10                                                                                                                                                                                                           | 5                                                                                                                                                                                                            | 11                                                                                                                                                                                                           |
| Bihar                                                                                                                                                                                                        | 16                                                                                                                                                                                                           | 21                                                                                                                                                                                                           |                                                                                                                                                                                                              |
| Chandigarh                                                                                                                                                                                                   | 1                                                                                                                                                                                                            | 3                                                                                                                                                                                                            | 2                                                                                                                                                                                                            |
| Chhattisgarh                                                                                                                                                                                                 | 2                                                                                                                                                                                                            | 11                                                                                                                                                                                                           | 4                                                                                                                                                                                                            |
| Dadra&Nagar Haveli                                                                                                                                                                                           |                                                                                                                                                                                                              |                                                                                                                                                                                                              | 0                                                                                                                                                                                                            |
| Daman & Diu                                                                                                                                                                                                  | 0                                                                                                                                                                                                            | 0                                                                                                                                                                                                            | 0                                                                                                                                                                                                            |
| Delhi                                                                                                                                                                                                        | 14                                                                                                                                                                                                           | 12                                                                                                                                                                                                           | 16                                                                                                                                                                                                           |
| Goa                                                                                                                                                                                                          | 1                                                                                                                                                                                                            |                                                                                                                                                                                                              | 1                                                                                                                                                                                                            |
| Gujarat                                                                                                                                                                                                      | 16                                                                                                                                                                                                           |                                                                                                                                                                                                              | 17                                                                                                                                                                                                           |
| Haryana                                                                                                                                                                                                      | 6                                                                                                                                                                                                            |                                                                                                                                                                                                              |                                                                                                                                                                                                              |
| Himachal Pradesh                                                                                                                                                                                             | 4                                                                                                                                                                                                            | 2                                                                                                                                                                                                            | 5                                                                                                                                                                                                            |
| Jammu & Kashmir                                                                                                                                                                                              | 2                                                                                                                                                                                                            | 13                                                                                                                                                                                                           |                                                                                                                                                                                                              |
| Jharkhand                                                                                                                                                                                                    | 6                                                                                                                                                                                                            | 4                                                                                                                                                                                                            | 6                                                                                                                                                                                                            |
| Karnataka                                                                                                                                                                                                    | 56                                                                                                                                                                                                           | 21                                                                                                                                                                                                           | 28                                                                                                                                                                                                           |
| Kerala                                                                                                                                                                                                       | 11                                                                                                                                                                                                           | 10                                                                                                                                                                                                           | 6                                                                                                                                                                                                            |
| Lakshadweep                                                                                                                                                                                                  | 0                                                                                                                                                                                                            | 0                                                                                                                                                                                                            | 0                                                                                                                                                                                                            |
| Madhya Pradesh                                                                                                                                                                                               | 12                                                                                                                                                                                                           | 17                                                                                                                                                                                                           | 20                                                                                                                                                                                                           |
| Maharashtra                                                                                                                                                                                                  | 31                                                                                                                                                                                                           | 46                                                                                                                                                                                                           | 40                                                                                                                                                                                                           |
| Manipur                                                                                                                                                                                                      | 1                                                                                                                                                                                                            |                                                                                                                                                                                                              |                                                                                                                                                                                                              |
| Meghalaya                                                                                                                                                                                                    |                                                                                                                                                                                                              | 2                                                                                                                                                                                                            | 0                                                                                                                                                                                                            |
| Mizoram                                                                                                                                                                                                      |                                                                                                                                                                                                              |                                                                                                                                                                                                              | 0                                                                                                                                                                                                            |
| Nagaland                                                                                                                                                                                                     |                                                                                                                                                                                                              | ;                                                                                                                                                                                                            | 0                                                                                                                                                                                                            |
| Orissa                                                                                                                                                                                                       | 2                                                                                                                                                                                                            |                                                                                                                                                                                                              | 6                                                                                                                                                                                                            |
| Pondicherry                                                                                                                                                                                                  | 2                                                                                                                                                                                                            |                                                                                                                                                                                                              | 1                                                                                                                                                                                                            |
| Punjab                                                                                                                                                                                                       | 16                                                                                                                                                                                                           |                                                                                                                                                                                                              | 13                                                                                                                                                                                                           |
| Rajasthan                                                                                                                                                                                                    |                                                                                                                                                                                                              | 23                                                                                                                                                                                                           | 157                                                                                                                                                                                                          |
| Sikkim                                                                                                                                                                                                       |                                                                                                                                                                                                              | 1                                                                                                                                                                                                            | 2                                                                                                                                                                                                            |
| Tamil Nadu                                                                                                                                                                                                   | 84                                                                                                                                                                                                           | 38                                                                                                                                                                                                           | 50                                                                                                                                                                                                           |
| Telangana                                                                                                                                                                                                    | 0                                                                                                                                                                                                            | 0                                                                                                                                                                                                            | 11                                                                                                                                                                                                           |
| Tripura                                                                                                                                                                                                      | 1                                                                                                                                                                                                            | 1                                                                                                                                                                                                            | 0                                                                                                                                                                                                            |
| Uttar Pradesh                                                                                                                                                                                                | 34                                                                                                                                                                                                           | 24                                                                                                                                                                                                           | 36                                                                                                                                                                                                           |
| Uttarakhand                                                                                                                                                                                                  | 4                                                                                                                                                                                                            | 5                                                                                                                                                                                                            | 5                                                                                                                                                                                                            |
| West Bengal_                                                                                                                                                                                                 | 16                                                                                                                                                                                                           |                                                                                                                                                                                                              | 17                                                                                                                                                                                                           |
| Overseas branches                                                                                                                                                                                            | 1                                                                                                                                                                                                            | 2                                                                                                                                                                                                            | 0                                                                                                                                                                                                            |
| Grand Total                                                                                                                                                                                                  | 395                                                                                                                                                                                                          | 373                                                                                                                                                                                                          | 509                                                                                                                                                                                                          |