Lok Sabha Question No. 1675 (UNSTARRED), answered on 2018-07-27
Subject: Scams in Banks
Ministry: FINANCE
Asked by: DEVENDRA (ALIAS) BHOLE SINGH SINGH

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

## lOK SABHA UNSTARRED QUESTION NO 1675

TO BE ANSWERED ON THE 27THJULY, 2018 (FRIDAY)/ SHRAVANA 05,1940 (SAKA)

## Scams in Banks

1675. SHRI DEVENDRA SINGH BHOlE:

Will the Minister of FINANCE be pleased to state:

- a) whether the Government is investigating the cases of bank scams that have occurred recently, if so, the details thereof, scam-wise and the outcome of the investigation as on date;
- b) the steps taken/proposed to be taken by the Government to check such scams for protecting the interests of depositors; and
- c) the action taken against the officers found involved in these scams?

..

'

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI SHIV PRATAP SHUKLA)

- (a) to (c): Data provided by Reserve Bank of India (RBI) in respect of number of fraud cases (amount involved in individual cases Rs.1 lakh and above) and on action taken on bank officials involved, is as under:
- (i) Bank wise data of frauds during the last two financial years 2015-16 & 2016-17 is at Annex1.
- (ii) Bank wise data on number of staff side action initiated/taken during last two calendar years 2016 and 2017 is at Annex-2.
- (iii) State wise data on number of staff side action initiated/taken during last two calendar years 2016 and 2017 is at Annex-3.

Tile measures taken to control and prevent frauds in the banks, inter-alia, are as follows:

- (i) In May, 2015, the Government of India issued instructions to all the CMDs/MD & CEOs of Public Sector Banks (PSBs) on "Framework for timely detection, reporting, investigation etc. relating to large value bank frauds", which, inter-alia provides that all accounts exceeding Rs. 50 crore, if classified as Non-Performing Assets, should be examined by

banks from the angle of possible fraud. A report would be placed before the Bank's Committee for review of NPAs on the findings of this investigation. The above instructions have been reiterated in February, 2018.

- (ii) RBI has issued Master Direction on "Frauds Classification and reporting" dated July 01, 2016. To compress the time taken in detection of fraud, a framework for handling loan frauds has been put 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.
- (iii) . For deterring economic offenders from evading the process of Indian law by remaining outside Indian jurisdiction, Government has introduced the Fugitive Economic Offenders Bill, 2018 to provide for attachment and confiscation fugitive economic offender'S property and has advised PSBs to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore.
- (iv) For enforcement of auditing standards and ensuring the quality of audits, Government has initiated establishment of National Financial Reporting Authority as an independent regulator.
- (v) To send a clear message that borrowers cannot wilfully default and continue to enjoy ownership of their assets, wilful defaulters and connected persons have been debarred from participating in the resolution process under the Insolvency and Bankruptcy Code (IBC).
- (vi) Launch of Central Fraud Registry (CFR), a web based searchable database of frauds reported by the banks, containing data for the last 13 years has been made operational by RBI in January, 2016.
- (vii) Banks have been advised through circulars for rotation and mandatory leave of staff in sensitive positions and the same was advised to be covered in internal audit also in 2011.

*****

| Bank-wise Bank Name                                                   | data of frauds (Amount involved in individual case>= Rs 1.00 Lakh) reported for the 2015-16   | data of frauds (Amount involved in individual case>= Rs 1.00 Lakh) reported for the 2015-16   | data of frauds (Amount involved in individual case>= Rs 1.00 Lakh) reported for the 2015-16   | data of frauds (Amount involved in individual case>= Rs 1.00 Lakh) reported for the 2015-16   | data of frauds (Amount involved in individual case>= Rs 1.00 Lakh) reported for the 2015-16   |
|-----------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
| Bank-wise Bank Name                                                   | No. of Frauds                                                                                 | Amount involved in Cr                                                                         | No. of Cases wherein staff is involved                                                        | Amount involved in Cr                                                                         | No. of Cases wherein staff is involved                                                        |
| Abu Dhabi Commercial Bank                                             | 1                                                                                             | 24.8894                                                                                       |                                                                                               | 0                                                                                             | 0                                                                                             |
| Allahabad Bank                                                        | 23                                                                                            | 290.908                                                                                       | 5                                                                                             | 895.087                                                                                       | 11                                                                                            |
| American Express Bankinq Corp. Andhra Bank                            | 187 44                                                                                        | 6.4183 250.459                                                                                | 1 5                                                                                           | 5.5854 245.601                                                                                | 1                                                                                             |
| Axis Bank                                                             | 227                                                                                           | 338.364                                                                                       | 37                                                                                            | 2020.38                                                                                       | 10                                                                                            |
| Bandhan Bank Limited                                                  | 1                                                                                             | 0.1155                                                                                        | 1                                                                                             | 1.5556                                                                                        | 43                                                                                            |
| Bank Internasionallndonesia                                           | 0                                                                                             | 0                                                                                             | 0                                                                                             | 17.7818                                                                                       | 13 0                                                                                          |
| Bank of Bahrain & Kuwait                                              | 0                                                                                             | 0                                                                                             | 0                                                                                             | 0.0697                                                                                        | 0                                                                                             |
| Bank of Baroda                                                        | 255                                                                                           | 1668.10                                                                                       | 33                                                                                            | 1164.85                                                                                       | 24                                                                                            |
| Bank of India                                                         | 156                                                                                           | 1217.58                                                                                       | 14                                                                                            | 2774.01                                                                                       | 15                                                                                            |
| Bank of Maharashtra                                                   | 45                                                                                            | 1307.73                                                                                       | 12                                                                                            | 425.023 0.13                                                                                  | 15 0                                                                                          |
| Bank of Nova Scotia                                                   | 0                                                                                             | 0                                                                                             | 0                                                                                             | 1.2396                                                                                        | 0                                                                                             |
| Bank of Tokyo Mitsubishi, UFJ                                         | 0                                                                                             | 0                                                                                             | 0                                                                                             |                                                                                               |                                                                                               |
| BhartiyaMahila Bank Ltd.                                              | 0                                                                                             | 0                                                                                             | 0                                                                                             | 0.5477                                                                                        | 0                                                                                             |
| Canara Bank                                                           | 94                                                                                            | 1589.78                                                                                       | 17 0                                                                                          | 610.165 0                                                                                     | 25 0                                                                                          |
| Capital Small Finance Bank Catholic Syrian Bank                       | 0 11                                                                                          | 0 9.1709                                                                                      | 6                                                                                             | 20.4479                                                                                       | 4                                                                                             |
| Central Bank of India                                                 | 167                                                                                           |                                                                                               | 29                                                                                            | 867.861                                                                                       | 27                                                                                            |
| Chinatrust Commercial Bank                                            | 1                                                                                             | 177.296 20.00                                                                                 | 0                                                                                             | 0                                                                                             | 0                                                                                             |
| Citibank                                                              | 115                                                                                           | 5.1051                                                                                        | 2                                                                                             | 11.7158                                                                                       | 1                                                                                             |
| City Union Bank                                                       | 5                                                                                             |                                                                                               | 2                                                                                             | 23.0336                                                                                       | 2                                                                                             |
| Corporation Bank                                                      | 135                                                                                           | 12.0867 1321.99                                                                               | 36                                                                                            | 694.076                                                                                       | 11                                                                                            |
| DBS Bank                                                              | 3                                                                                             | 71.1153                                                                                       | 0                                                                                             | 0.0819                                                                                        | 0                                                                                             |
| Dena Bank                                                             | 21                                                                                            | 71.0243                                                                                       | 1                                                                                             | 468.093                                                                                       | 6                                                                                             |
| Deutsche Bank(Asia)                                                   | 1                                                                                             | 0.015                                                                                         | 0                                                                                             | 0.0617 0                                                                                      | 0 0                                                                                           |
| Development Credit Bank                                               | 14                                                                                            | 4.5935                                                                                        | 0                                                                                             |                                                                                               |                                                                                               |
| Dhanalakshmi Bank Doha Bank Qsc                                       | 4                                                                                             | 5.5612                                                                                        | 2                                                                                             | 90.8509 8.9794                                                                                | 1 0                                                                                           |
| Equitas Small Finance Bank                                            | 0 0                                                                                           | 0 0                                                                                           | 0 0                                                                                           | 2.0152                                                                                        | 2                                                                                             |
| Export Import Bank of India                                           | 0                                                                                             | 0                                                                                             | 0                                                                                             | 108.788                                                                                       | 0                                                                                             |
| Federal Bank                                                          | 49                                                                                            | 81.9981                                                                                       | 3                                                                                             | 259.131 27.1165                                                                               | 21                                                                                            |
| FirstRand Bank HDFC Bank                                              | 0 260                                                                                         | 0 97.2898                                                                                     | 0 29                                                                                          | 160.346                                                                                       | 0 62                                                                                          |
| ,                                                                     |                                                                                               | 86.1177                                                                                       | 0                                                                                             | 0.9913                                                                                        | 0                                                                                             |
| HSBC ICICI Bank -                                                     | 36 588                                                                                        | 347.715                                                                                       | 66                                                                                            | 412.699 1136.84                                                                               | 35                                                                                            |
| IDBI Bank Ltd. Idfc Bank Limited                                      | 129 0                                                                                         | 262.053 0                                                                                     | 8 0                                                                                           | 0.391                                                                                         | 1 0                                                                                           |
| Indian Bank                                                           |                                                                                               |                                                                                               |                                                                                               | 480.227                                                                                       | 6                                                                                             |
| Indian Overseas Bank                                                  | 87 109                                                                                        | 138.056 598.33                                                                                | 23 14                                                                                         | 1372.11                                                                                       | 27                                                                                            |
| Indusind Bank                                                         | 21                                                                                            | 5.289                                                                                         | 7                                                                                             | 2.896                                                                                         | 11                                                                                            |
| ING Vvsya Bank                                                        | 0                                                                                             | 0                                                                                             | 0                                                                                             | 0                                                                                             | 0                                                                                             |
| Jammu & Kashmir Bank                                                  | 14                                                                                            | 8.6655                                                                                        | 6                                                                                             | 311.475 31.0362                                                                               | 2                                                                                             |
| Karnataka Bank KarurVysya Bank                                        | 15                                                                                            | 91.9572                                                                                       | 3 4                                                                                           | 17.8235                                                                                       | 1 4                                                                                           |
| Korea Exchanqe Bank                                                   | 21 0                                                                                          | 182.433 0                                                                                     | 0                                                                                             | 0.0228 111.547                                                                                | 0 13                                                                                          |
| Kotak Mahindra Bank                                                   | 114                                                                                           | 45.0213                                                                                       | 6 0                                                                                           | 0                                                                                             | 0                                                                                             |
| Krishna BhimaSamruddhi Lab                                            | 0                                                                                             | 0                                                                                             | 5                                                                                             | 109.954                                                                                       |                                                                                               |
| Lakshmi Vilas Bank                                                    | 12                                                                                            | 22.0114                                                                                       | 0                                                                                             | 0                                                                                             | 8                                                                                             |
| Mashreqbank Nainital Bank                                             | 1 21                                                                                          | 0.0366 1.8781                                                                                 |                                                                                               | 0.3591                                                                                        |                                                                                               |
|                                                                       |                                                                                               |                                                                                               | 0                                                                                             |                                                                                               |                                                                                               |
| Oman Intemational Bank Oriental Bank of Commerce Punjab and Sind Bank | 0 114 12                                                                                      | 0 807.296                                                                                     | 0 12 1                                                                                        | 0 162.768 178.784                                                                             | 9 3                                                                                           |
| Puniab National Bank Ratnakar Bank Ltd Royal Bank of Scotland         | 131 10 7                                                                                      | 131.939 352.852 3.8354                                                                        | 17 1 0                                                                                        | 2808.27 3.1544 0.01                                                                           | 18 1                                                                                          |
|                                                                       |                                                                                               | 0.1104                                                                                        |                                                                                               | 0                                                                                             | 0                                                                                             |
| Shinhan Bank                                                          | 2                                                                                             | 5.8416                                                                                        | 0                                                                                             | 11.3086                                                                                       | 0                                                                                             |
| Small Industries Dev. Bank of India                                   | 2                                                                                             | 45.3185                                                                                       | 0                                                                                             | 313.963                                                                                       | 0 2                                                                                           |
| South Indian Bank                                                     | 7                                                                                             | 1.5822                                                                                        | 3                                                                                             | 6.5187                                                                                        | 0                                                                                             |
| Standard Chartered Bank                                               | 127 48                                                                                        | 3.6603 147.729                                                                                | 3 5                                                                                           | 132.872                                                                                       | 8                                                                                             |
| State Bank of Bikaner & Jaipur State Bank of Hyderabad                | 34                                                                                            | 673.667                                                                                       | 7                                                                                             | 112.156 2422.37                                                                               | 9                                                                                             |
| State Bank of India                                                   | 562                                                                                           | 1895.51                                                                                       | 66 6                                                                                          | 279.771                                                                                       | 83                                                                                            |
| State Bank of Mvsore State Bank of Patiala                            | 67 40                                                                                         | 21.7285 413.199                                                                               | 4                                                                                             | 35.8337                                                                                       | 6 6                                                                                           |
|                                                                       |                                                                                               |                                                                                               |                                                                                               | ·57.0941                                                                                      | 2                                                                                             |
| State Bank of Travancore                                              | 19                                                                                            | 138.88                                                                                        | 6                                                                                             |                                                                                               |                                                                                               |
| Syndicate Bank                                                        | 178                                                                                           | 1640.68                                                                                       | 14                                                                                            | 376.232 74.786                                                                                | 19                                                                                            |
| Tamilnad Mercantile Bank                                              | 12                                                                                            | 5.7214                                                                                        | 2                                                                                             |                                                                                               | 1                                                                                             |
| The Industrial Finance Corp of India                                  | 5                                                                                             | 253.361                                                                                       | 2                                                                                             | 214.861 695.482                                                                               | 0                                                                                             |
| UCO Bank                                                              | 85 146                                                                                        | 248.149                                                                                       | 44                                                                                            |                                                                                               | 15 4                                                                                          |
| Union Bank of India                                                   |                                                                                               | 1297.73                                                                                       | 12                                                                                            | 920.723                                                                                       |                                                                                               |
| United Bank of India                                                  | 67                                                                                            | 142.667                                                                                       | 2                                                                                             | 83.8214                                                                                       | 5                                                                                             |
| Viiava Bank                                                           | 21                                                                                            | 104.654                                                                                       | 0                                                                                             | 132.716                                                                                       | 8                                                                                             |
|                                                                       | 10                                                                                            | 1.547                                                                                         | 0                                                                                             | 17.3801                                                                                       | 2                                                                                             |
| Yes Bank Grand Total                                                  | 4693                                                                                          | 18698.82                                                                                      | 584                                                                                           | 23933.85                                                                                      | 603                                                                                           |

Source: RBI, the above data, Includes all types of frauds, Inter-alia, on account .of rnisappropriation and criminal breach of trust, fraudulent encashment through forged instruments, cash shortages, cheating and forgery etc.

| Bank Name                                                 | Number of staff action taken   |         |                            |         |         |
|-----------------------------------------------------------|--------------------------------|---------|----------------------------|---------|---------|
| ALLAHABAD BANK                                            | 116                            | 121     | 121                        | 121     | 121     |
| AMERICAN EXPRESS BANKING CORP.                            | 1                              | 11      | 11                         | 11      | 11      |
| ANDHRA BANK                                               | 124                            | 77      | 77                         | 77      | 77      |
| AXIS BANK LIMITED                                         | 160                            | 306     | 306                        | 306     | 306     |
| BANDHAN BANK LIMITED                                      | 41                             | 98      | 98                         | 98      | 98      |
| BANK OF BARODA                                            | 225                            | 137     | 137                        | 137     | 137     |
| BANK OF INDIA                                             | 8                              | 14      | 14                         | 14      | 14      |
| BANK OF MAHARASHTRA                                       | 22                             | 56      | 56                         | 56      | 56      |
| CANARA BANK                                               | 291                            | 216     | 216                        | 216     | 216     |
| CATHOLIC SYRIAN BANK LTD                                  | 36                             | 36      | 36                         | 36      | 36      |
| CENTRAL BANK OF INDIA                                     | 274                            | 132     | 132                        | 132     | 132     |
| CITIBANK N.A                                              | 2                              |         |                            |         |         |
| CITY UNION BANK LIMITED                                   | 1                              | 6       | 6                          | 6       | 6       |
| CORPORATION BANK DBS BANK LTD.                            | 124                            | 148     | 148                        | 148     | 148     |
| KRISHNA BHIMA SAMRUDDHI LAKSHMI VILAS BANK LTO            | 625                            |         |                            | 879     |         |
| HONGKONG AND SHANGHAI BANKING CORPN.LTD.                  |                                |         | DCB BANK LIMITED DENA BANK | 1       |         |
| FEDERAL BANK LTO HDFC BANK LTD.                           | 81 1 1                         | 95      | 95                         | 95      | 95      |
| DOHA BANK QSC EQUITAS SMALL FINANCE                       |                                | 14      | 14                         | 14      | 14      |
| BANK LIMITED EXPORT IMPORT BANK OF INDIA                  |                                |         |                            |         |         |
|                                                           | 2 67                           | 3       | 3                          | 3       | 3       |
|                                                           | 11                             | 1       | 1                          | 1       | 1       |
|                                                           |                                | 2       | 2                          | 2       | 2       |
| ICICI BANK LIMITED                                        | 82 135                         | 3 105   | 3 105                      | 3 105   | 3 105   |
| INDIAN BANK INDIAN OVERSEAS                               | 41                             | 18      | 18                         | 18      | 18      |
| BANK INDUSIND BANK LTO ,                                  | 17                             | 11      | 11                         | 11      | 11      |
| ING VYSYA BANK LTD                                        |                                |         |                            |         |         |
| JAMMU & KASHMIR BANK LTO KARNATAKA BANK LTO               | 16 35                          | 61 11   | 61 11                      | 61 11   | 61 11   |
|                                                           | 6                              | 3 61    | 3 61                       | 3 61    | 3 61    |
| KARUR VYSYA BANK LTD KOTAK MAHINDRA BANK LTD.             | 13                             |         |                            |         |         |
| LAB                                                       |                                | 1       | 1                          | 1       | 1       |
| LTD.                                                      | 16                             | 47 6    | 47 6                       | 47 6    | 47 6    |
| NAINITAL BANK LTO                                         |                                | 12      | 12                         | 12      | 12      |
| ORIENTAL BANK OF COMMERCE PUNJAB AND SIND BANK            | 80 12                          | 34      | 34                         | 34      | 34      |
| PUNJAB NATIONAL BANK                                      | 331                            | 376     | 376                        | 376     | 376     |
| RBL BANK LIMITED                                          | 5                              |         |                            |         |         |
| SBM BANK (MAURITIUS)L TO.                                 |                                | 1       | 1                          | 1       | 1       |
| SMALL INDUSTRIES DEV. BANK OF INDIA SOUTH INDIAN BANK LTO | 4' 20                          | 19      | 19                         | 19      | 19      |
|                                                           |                                | 1       | 1                          | 1       | 1       |
| STANDARD CHARTERED BANK                                   |                                | 6       | 6                          | 6       | 6       |
| STATE BANK OF BIKANER AND JAIPUR STATE BANK OF HYDERABAD  | 67 44                          | 12 251  | 12 251                     | 12 251  | 12 251  |
| STATE BANK OF INDIA STATE BANK OF MYSORE                  | 338 9                          |         |                            |         |         |
| STATE BANK OF PATIALA                                     |                                |         |                            |         |         |
|                                                           | 75                             | 3       | 3                          | 3       | 3       |
| STATE BANK OF TRA VANCORE                                 | . 72                           | 2 1     | 2 1                        | 2 1     | 2 1     |
| SUBHADRA LOCAL AREA BANK LTD. SYNDICATE BANK              |                                | 76      | 76                         | 76      | 76      |
|                                                           | 219                            | 12      | 12                         | 12      | 12      |
| TAMILNAD MERCANTILE BANK LTO THE DHANALAKSHMI BANK LTO    | 26 26                          | 1       | 1                          | 1       | 1       |
| THE--INDUSTRIAL FINANCE CORP OF                           |                                |         |                            |         |         |
| LTD                                                       |                                |         |                            |         |         |
| INDIA                                                     | 1                              |         |                            |         |         |
|                                                           |                                | 82      | 82                         | 82      | 82      |
| UCO BANK                                                  | 321 66                         | 30 96 5 | 30 96 5                    | 30 96 5 | 30 96 5 |
| UNION BANK OF INDIA UNITED BANK OF INDIA VIJAYA BANK      | 67 2 1                         | 104     | 104                        | 104     | 104     |
| YES BANK LTD. Grand Total                                 | 4360                           | 3804    | 3804                       | 3804    | 3804    |

Source:

RBI

v

~.

| State                     | Number of staff action taken   | Number of staff action taken   |
|---------------------------|--------------------------------|--------------------------------|
|                           |                                | 2017                           |
| ANDAMAN & NICOBAR ISLANDS | 1                              |                                |
| ANDHRA PRADESH            | 271                            | 181                            |
| ARUNACHAL PRADESH         |                                | 9                              |
| ASSAM                     | 75                             | 90                             |
| BIHAR                     | 129                            | 155                            |
| CHANDIGARH                | 17                             | 42                             |
| CHHATTISGARH              | 75                             | 61                             |
| DAMAN & DIU               |                                | 1                              |
| DELHI                     | 415                            | 82                             |
| GOA                       | 14                             | 2                              |
| GUJARAT                   | 211                            | 121                            |
| HARYANA                   | 132                            | 151                            |
| HIMACHAL PRADESH          | 14                             | 12                             |
| JAMMU & KASHMIR           | 75                             | 72                             |
| JHARKHAND                 | 64                             | 70                             |
| KARNATAKA                 | 250                            | 167                            |
| KERALA                    | 113                            | 46                             |
| MADHYA PRADESH            | 152                            | 199                            |
| MAHARASHTRA               | 528                            | 542                            |
| MANIPUR                   | 6                              | 2                              |
| MEGHALAYA                 | 1                              |                                |
| MIZORAM                   | 3                              |                                |
| NAGALAND                  | 5                              |                                |
| NCT OF DELHI              |                                | 224                            |
| ODISHA                    |                                | 64                             |
| ORISSA                    | 94                             | 7                              |
| Others                    | 9                              | 4                              |
| PONDICHERRY               | 2                              |                                |
| PUDUCHERRY ,              |                                | 2                              |
| PUNJAB                    | 277                            | 165                            |
| RAJASTHAN                 | 163                            | 205                            |
| SIKKIM                    | 3                              | 1                              |
| TAMIL NADU                | 411                            | 374                            |
| TELANGANA                 |                                | 90                             |
| TRIPURA                   | 6                              |                                |
| UTTAR PRADESH             | 519                            | 422                            |
| UTTARAKHAND               |                                | 15                             |
| UTTARANCHAL               | 59                             | 10                             |
| WEST BENGAL               | 266                            | 216                            |
| Grand Total               | 4360                           | 3804                           |

Source: RBI

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