Lok Sabha Question No. 536 (UNSTARRED), answered on 2018-07-20
Subject: Mega Scams
Ministry: FINANCE
Asked by: RAJAN BABURAO  VICHARE, JANARDAN SINGH SIGRIWAL

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

## LOK SABHA UNSTARRED  QUESTION  NO.  †536

TO BE ANSWERED  ON THE 20 TH  JULY  2018/ ASHADHA  29, 1940 (SAKA)

## Mega Scams

## †536. SHRI RAJAN  VICHARE: SHRI JANARDAN  SINGH SIGRIWAL:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether  the occurrences  of mega scams in nationalised  and private  banks have come into  the light  of the Government  regularly;
- (b) if so, the details  of the scams reported  during  the last five years  as on date and the amount  involved  in the said scams,  bank-wise;
- (c) whether  the Government  has any  proposal  to formulate  any  effective law to check  scams in nationalised  banks,  if so, the details  thereof  and if not,  the reasons therefor;  and
- (d) whether  the Reserve  Bank of India has issued new  guidelines/instructed the  banks   to  bring   changes  as  per  its  new   guidelines   to  strengthen   the monitoring  mechanism  and if so, the details  thereof?

## ANSWER

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

- (a)  and  (b):  As  per  the  Reserve   Bank of  India(RBI),   Scheduled   Commercial Banks report  cases of fraud where  the amount  involved  is above Rs. 1 lakh  to RBI and they  reported  24,593 cases, involving  a total  amount  of Rs. 1,13,054 crore,   in  the  past  five  financial   years.   Details   are  at  Annex-I.   It  may   be  noted that  fraud  data is by  the year  of reporting  and not the year  of occurrence  of the fraud or sanction  of loan,  Letter  of Undertaking etc.,  which  may  be of an earlier period. E.g., the  fraud   in  the  Brady   House   branch   of  Punjab   National   bank (PNB) was reported  in February  2018 but  is a continuing  fraud  since 2011.

(c):  To  deter   economic   offenders  from evading   the  process  of  Indian   law   by remaining  outside  the jurisdiction of Indian  courts,  Government  has introduced the Fugitive  Economic  Offenders  Bill,  2018 in Parliament. The bill  provides  for attachment   of  property   of  a  fugitive   economic   offender,   confiscation   of  such offender's  property  and disentitlement of the offender from defending  any  civil claim.  Government  has also proactively taken  other  steps for pursuing  detection of frauds,  which  include  the following:

-  It  has  instructed   Public   Sector   Banks   (PSBs)  to  examine   all  accounts exceeding   Rs.  50  crore,   if  classified   as  Non-Performing Asset  (NPA), from the  angle  of possible  fraud.
-  It  has  asked  PSBs  to  immediately initiate   examination of  the  issue  of wilful  default  once a fraud  is reported  to RBI.
-  It has also asked PSBs to seek a report  on the borrower  from the Central Economic  Intelligence  Bureau  (CEIB), in case an account  turns  NPA.

(d): RBI has informed  that  it has already  issued various  guidelines  applicable  to banks  on  examining   staff  accountability under   various   circumstances,   that   all PSBs have a well-established  vigilance  mechanism  headed by  a Chief  Vigilance Officer  (CVO)  directly  appointed  by  the Government  of India,  and that  CVOs are expected  to keep a close watch  on various  aspects of functioning  of the bank in which  they  are posted.

RBI has also constituted   an  Expert   Committee   to  look   into, inter  alia ,  factors leading  to increasing  incidence  of frauds in banks  and the measures  (including information   technology   interventions) needed  to  curb and  prevent   it,   and  the role and  effectiveness   of  various types of  audits   conducted   in  banks   in mitigating  the incidence  of frauds.

## Lok Sabha Unstarred  Question  No. 536  for  20.7.2018

## Data of fraud  reported  by banks, wherein  amount  involved  in each individual  fraud  is Rs. 1 lakh and above

|                                                   | 2013-14      | 2013-14                     | 2014-15      | 2014-15                     | 2015-16      | 2015-16                     | 2016-17      | 2016-17                     | 2017-18      | 2017-18               |
|---------------------------------------------------|--------------|-----------------------------|--------------|-----------------------------|--------------|-----------------------------|--------------|-----------------------------|--------------|-----------------------|
|                                                   | No of frauds | Amount Involved in Rs Lakhs | No of frauds | Amount Involved in Rs Lakhs | No of frauds | Amount Involved in Rs Lakhs | No of frauds | Amount Involved in Rs Lakhs | No of frauds | Amou Involv in R Lakh |
| Bank name                                         |              |                             |              |                             |              |                             |              |                             |              |                       |
| Abu Dhabi Commercial Bank                         | 1            | 51                          | 1            | 6.91                        | 1            | 2488.94                     | 0            | 0                           | 0            |                       |
| Allahabad Bank                                    | 95           | 61806                       | 47           | 7597.64                     | 23           | 29090.8                     | 60           | 89508.67                    | 41           | 152532.               |
| American Express Banking Corp.                    | 218          | 2121.99                     | 176          | 1007.51                     | 187          | 641.83                      | 166          | 558.54                      | 349          | 1175.                 |
| Andhra Bank                                       | 38           | 21430.3                     | 52           | 51148.1                     | 44           | 25045.9                     | 64           | 24560.11                    | 52           | 134517.               |
| AU Small Finance Bank                             | 0            | 0                           | 0            | 0                           | 0            | 0                           | 0            | 0                           | 5            | 285.                  |
| Axis Bank                                         | 193          | 47374.3                     | 187          | 33713.5                     | 227          | 33836.4                     | 222          | 202037.9                    | 269          | 59957.                |
| Bandhan Bank Limited                              | 0            | 0                           | 0            | 0                           | 1            | 11.55                       | 13           | 155.56                      | 22           | 249.                  |
| Bank Internasional Indonesia                      | 0            | 0                           | 0            | 0                           | 0            | 0                           | 1            | 1778.18                     | 0            | 0.                    |
| Bank of America                                   | 1            | 10.5                        | 0            | 0                           | 0            | 0                           | 0            | 0                           | 18           | 39.                   |
| Bank of Bahrain & Kuwait                          | 0            | 0                           | 0            | 0                           | 0            | 0                           | 1            | 6.97                        | 0            | 0.                    |
| Bank of Baroda                                    | 204          | 45315.7                     | 303          | 122602                      | 255          | 166810                      | 224          | 116484.7                    | 156          | 370028.               |
| Bank of India                                     | 100          | 22690.3                     | 131          | 9244.37                     | 156          | 121758                      | 162          | 277400.7                    | 157          | 261976.               |
| Bank of Maharashtra                               | 33           | 2153.52                     | 50           | 23905.6                     | 45           | 130773                      | 75           | 42502.25                    | 62           | 108236.               |
| Bank of Nova Scotia                               | 0            | 0                           | 0            | 0                           | 0            | 0                           | 1            | 13                          | 0            | 0.                    |
| Bank of Tokyo Mitsubishi, UFJ                     | 0            | 0                           | 0            | 0                           | 0            | 0                           | 1            | 123.96                      | 1            | 18.                   |
| Barclays Bank                                     | 1            | 123.84                      | 0            | 0                           | 0            | 0                           | 0            | 0                           | 0            | 0.                    |
| Bhartiya Mahila Bank Ltd.                         | 0            | 0                           | 0            | 0                           | 0            | 0                           | 4            | 54.77                       | 0            | 0.                    |
| BNP Paribas                                       | 0            | 0                           | 0            | 0                           | 0            | 0                           | 0            | 0                           | 0            | 0.                    |
| Canara Bank                                       | 81           | 18029.6                     | 114          | 17563.2                     | 94           | 158978                      | 119          | 61016.51                    | 107          | 19241.                |
| Capital Small Finance Bank                        | 0            |                             | 2            | 18.2                        | 0            | 0                           | 0            | 0                           | 0            | 0.                    |
| Catholic Syrian Bank                              | 8            | 0 2582.29                   | 8            | 179.45                      | 11           | 917.09                      | 39           | 2044.79                     | 29           | 11755.                |
| Central Bank of India                             | 156          | 82328.5                     | 214          | 214972                      | 167          | 17729.6                     | 146          | 86786.13                    | 143          | 140017.               |
| Chinatrust Commercial Bank                        | 1            | 475                         | 3            | 11165.3                     | 1            | 2000                        | 0            | 0                           | 0            | 0. 2212.              |
| Citibank                                          | 101          | 1307.15                     | 94           | 848.88                      | 115          | 510.51                      | 177          | 1171.58                     | 226          | 4405.                 |
| City Union Bank Corporation Bank                  | 5 77         | 226.57 27827.8              | 2 73         | 644.19 122209               | 5 135        | 1208.67 132199              | 3 83         | 2303.36 69407.57            | 7 70         | 130151.               |
| DBS Bank                                          | 3            | 14356.2                     | 3            | 3442.4                      |              | 7111.53                     | 1            | 8.19                        | 0            | 0.                    |
| Dena Bank                                         | 36           | 16281                       | 41           | 40015.9                     | 3 21         | 7102.43                     | 43           | 46809.33                    | 27           | 10207.                |
| Deutsche Bank(Asia)                               | 2            | 13.69                       | 2            | 15.25                       | 1            | 1.5                         | 1            | 6.17                        | 6            | 9555.                 |
| Development Credit Bank                           | 8            | 29.86                       | 2            | 4.08                        | 14           | 459.35                      | 0            | 0                           | 10           | 276.                  |
| Dhanalakshmi Bank                                 | 15           | 6320.46                     | 7            | 7284.13                     | 4            | 556.12                      | 6            | 9085.09                     | 8            | 1175.                 |
| Doha Bank Qsc                                     | 0            | 0                           | 0            | 0                           | 0            | 0                           | 3            | 897.94                      | 0            | 0.                    |
| Equitas Small Finance Bank                        | 0            | 0                           | 0            |                             | 0            | 0                           | 2            | 201.52                      | 15           | 198.                  |
| ESAF Small Finance Bank                           |              |                             | 0            | 0 0                         | 0            | 0                           | 0            | 0                           | 1            | 4.                    |
| Export Import Bank of India                       | 0 1          | 0 10000                     | 3            | 13474.3                     | 0            | 0                           | 2            | 10878.83                    | 1            | 1986.                 |
| Federal Bank                                      | 37           | 957.32                      | 44           | 8173.99                     | 49           | 8199.81                     | 58           | 25913.14                    | 30           | 529.                  |
| Fincare Small Finance Bank                        | 0            | 0                           | 0            | 0                           | 0            | 0                           | 0            | 0                           | 2            | 4.                    |
| Fino Payments Bank Limited                        | 0            | 0                           | 0            | 0                           | 0            | 0                           | 0            | 0                           | 3            | 90.                   |
| FirstRand Bank                                    | 0            | 0                           | 0            | 0                           | 0            | 0                           | 2            | 2711.65                     | 0            | 0.                    |
| HDFC Bank                                         | 164          | 1525.96                     | 218          | 1753.29                     | 260          | 9728.98                     | 313          | 16034.61                    | 370          | 13753.                |
| HSBC                                              | 116          | 8017.17                     | 38           | 2645.75                     | 36           | 8611.77                     | 48           | 99.13                       | 276          | 576.                  |
| ICICI Bank                                        | 485          | 76306.3                     | 433          | 26977.2                     | 588          | 34771.5                     | 686          | 41269.94                    | 754          | 58015.                |
| IDBI Bank Ltd.                                    | 92           | 62554.2                     | 56           | 55795.1                     | 129          | 26205.3                     | 107          | 113683.51                   | 177          | 133796.               |
| Idfc Bank Limited                                 | 0            | 0                           | 0            | 0                           | 0            | 0                           | 3            | 39.1                        | 1            | 1.                    |
| Indian Bank                                       | 54           | 4348.64                     | 95           | 9103.97                     | 87           | 13805.6                     | 79           | 48022.73                    | 53           | 2754.                 |
| Indian Overseas                                   | 125          | 48473.4                     | 138          |                             |              |                             | 95           | 137210.69                   | 67           |                       |
| Bank Indusind Bank                                | 27           | 2963.63                     | 14           | 57564.1                     | 109 21       | 59833 528.9                 | 23           | 289.6                       | 28           | 102548. 2193.         |
| ING Vysya Bank                                    | 14           | 3958.47                     | 35           | 13340.8 619.22              | 0            | 0                           | 0            | 0                           |              | 0.                    |
| Jammu & Kashmir Bank                              | 7            | 662.01                      | 7            | 90286.7                     | 14           | 866.55                      | 23           | 31147.54                    | 0 14         | 21510.                |
| Karnataka Bank                                    |              |                             |              | 2212.52                     | 15           | 9195.72                     | 25           | 3103.62                     |              |                       |
|                                                   | 21           | 1548.11                     | 22           |                             |              |                             | 21           |                             | 15           | 21455.                |
| Karur Vysya Bank                                  | 11 0         | 148.57                      | 16           | 12316.2                     | 21 0         | 18243.3                     | 2            | 1782.35 2.28                | 12           | 1921.                 |
| Korea Exchange Bank                               |              | 0                           | 0            | 0                           | 114          | 0                           |              |                             | 0 269        | 0. 5675.              |
| Kotak Mahindra Bank Krishna Bhima Samruddhi Lab   | 80 0         | 11528 0                     | 56 1         | 5896.64 1.02                | 0            | 4502.13 0                   | 126 0        | 11154.66 0                  | 1            | 3.                    |
| Lakshmi Vilas Bank                                | 6            |                             |              | 5449.3                      | 12           |                             | 13           | 10995.43                    | 36           |                       |
|                                                   |              | 7072.67                     | 5            |                             |              | 2201.14                     |              |                             |              | 7085. 0.              |
| Mashreqbank                                       | 0 3          | 0 80.07                     | 0 5          | 0                           | 1 21         | 3.66                        | 0 4          | 0 35.91                     | 0 6          |                       |
| Nainital Bank                                     |              |                             |              | 55.23                       | 0            | 187.81 0                    | 0            | 0                           |              | 28. 0.                |
| Oman International Bank Oriental Bank of Commerce | 0 92         | 0 5352.37                   | 1 127        | 32.91 76483.8               |              |                             | 56           | 16276.83                    | 0 226        |                       |
|                                                   |              |                             |              |                             | 114          | 80729.6                     |              |                             |              | 65222.                |

| Punjab and Sind Bank                 |   30 |   6979.19 |   30 |   3916.14 |   12 |   13193.9 |   16 |   17878.35 |   22 |   9032. |
|--------------------------------------|------|-----------|------|-----------|------|-----------|------|------------|------|---------|
| Punjab National Bank                 |  239 |  55838.3  |  180 | 230973    |  131 |  35285.2  |  158 |  280827    |  169 |  152143 |
| Rabobank International               |    0 |      0    |    0 |      0    |    0 |      0    |    0 |       0    |    1 |    2000 |
| Ratnakar Bank Ltd                    |    5 |   1518.56 |   15 |    905    |   10 |    383.54 |   13 |     315.44 |   15 |     225 |
| Royal Bank of Scotland               |   11 |     41.41 |    2 |     19.48 |    7 |     11.04 |    1 |       1    |    0 |       0 |
| Shinhan Bank                         |    0 |      0    |    0 |      0    |    2 |    584.16 |    0 |       0    |    0 |       0 |
| Small Industries Dev. Bank of India  |    6 |    674.13 |    7 |   1109.28 |    2 |   4531.85 |    3 |    1130.86 |   10 |    6350 |
| South Indian Bank                    |   20 |   1151.4  |    9 |   1707.47 |    7 |    158.22 |    7 |   31396.3  |    8 |    9453 |
| Standard Chartered Bank              |  104 |  48028.4  |   81 |   8737.96 |  127 |    366.03 |  320 |     651.87 |   95 |    1651 |
| State Bank of Bikaner & Jaipur       |   43 |  14892.9  |   41 |  46180.6  |   48 |  14772.9  |   38 |   13287.2  |    0 |       0 |
| State Bank of Hyderabad              |   27 |  36508.4  |   31 |   6865.38 |   34 |  67366.7  |   38 |   11215.6  |    0 |       0 |
| State Bank of India                  |  549 |  90692.4  |  651 | 161854    |  562 | 189551    |  544 |  242237    |  981 |  254197 |
| State Bank of Mauritius              |    1 |   4631.02 |    0 |      0    |    0 |      0    |    0 |       0    |    2 |    8378 |
| Subhadra Local Area Bank             |    0 |      0    |    0 |      0    |    0 |      0    |    0 |       0    |    1 |       1 |
| Suryadaya Small Finance Bank         |    0 |      0    |    0 |      0    |    0 |      0    |    0 |       0    |    8 |      31 |
| State Bank of Mysore                 |   20 |   9282.68 |   97 |   9074.73 |   67 |   2172.85 |   92 |   27977.1  |    0 |       0 |
| State Bank of Patiala                |   40 |   9885.16 |   39 |  29030.3  |   40 |  41319.9  |   47 |    3583.37 |    0 |       0 |
| State Bank of Travancore             |   33 |  11647.8  |   34 |  23623.3  |   19 |  13888    |   44 |    5709.41 |    0 |       0 |
| Syndicate Bank                       |  102 |  13271.8  |  208 |  79310.5  |  178 | 164068    |  166 |   37623.2  |  147 |   54106 |
| Tamilnad Mercantile Bank             |   27 |   5230.11 |   21 |   1262.8  |   12 |    572.14 |   20 |    7478.6  |   29 |   17682 |
| The Industrial Finance Corp of India |    0 |      0    |    1 |   9818.32 |    5 |  25336.1  |    1 |   21486.1  |    1 |    8133 |
| UCO Bank                             |   56 |  36424.1  |   87 | 141098    |   85 |  24814.9  |   59 |   69548.2  |   72 |  123271 |
| Ujjivan Small Finance Bank           |    0 |      0    |    0 |      0    |    0 |      0    |    0 |       0    |   28 |      75 |
| Union Bank of India                  |   85 |   9209.21 |  111 |  36982.7  |  146 | 129773    |  111 |   92072.3  |   73 |  114802 |
| United Bank of India                 |  125 |  34898    |  128 |  68035.2  |   67 |  14266.7  |   30 |    8382.14 |   62 |   88137 |
| Utkarsh Small Finance Bank           |    0 |      0    |    0 |      0    |    0 |      0    |    0 |       0    |    6 |      17 |
| Vijaya Bank                          |   59 |   6187.44 |   35 |  35174.4  |   21 |  10465.4  |   58 |   13271.6  |   19 |    3101 |
| Yes Bank                             |   12 |   1736.34 |    5 |     58.26 |   10 |    154.7  |    7 |    1738.01 |    8 |      67 |

Note:Fraud  data is by the year of reporting  and not the year of occurrence of the fraud or sanction of loan, Letter of Undertaking  etc., which may be of an earlier   period. E.g., the  fraud   in  PNB's Brady House branch was reported  in February  2018  but is a continuing  fraud  since 2011.