Lok Sabha Question No. 2129 (UNSTARRED), answered on 2016-07-29
Subject: Banking Frauds
Ministry: FINANCE
Asked by: PARBHUBHAI NAGARBHAI VASAVA, NANABHAU FALGUNRAO PATOLE, VIRENDER KASHYAP

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

LOK SABHA UNSTARRED QUESTION NO 2129

TO BE ANSWERED ON THE 29 JULY, 2016 / SRAVANA 7, 1938 (SAKA)

## BANKING FRAUDS

## 2129 . SHRI PARBHUBHAI NAGARBHAI VASAVA: SHRI NANA PATOLE: SHRI VIRENDER KASHYAP:

Will the Minister of FINANCEbe pleased to state:

- a) whether several incidents of banking frauds and other irregularities have been noticed by the Government in Public Sector Banks(PSBs);
- b) if  so,  the  details  of  such  incidents/cases  reported  along  with  the  amount involved  therein  during  the  last  three  years  and  the  current  year,  bank  and State/UT-wise;
- c) whether the Government has conducted any inquiry in this regard, if so, the details thereof along with the number of bank officials involved and the action taken against them during the said period, bank and State/UT-wise; and
- d) the  remedial  steps  taken/being  taken  by  the  Government  to  check  such incidents in future?

## ANSWER

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

(a) & (b): Reserve Bank of India (RBI) has informed that Banks report fraud cases of Rs 1 Lakh and above to RBI. Details of the frauds reported by Public Sector Banks (PSBs) for the last three years and current year are given in Annex-1.

(c) & (d): Bank Fraud cases of Rs. 1 lakh and above reported by PSBs where staff is involved is given in Annex-2.

Banks  initiate/probe  staff  accountability  and  staff  involvement  in  all  the  fraud cases and on completion of investigation, commensurate punishment is awarded to the delinquent  employees  based  on  the  seriousness  of  the  wrongdoings  as  per  Bank's disciplinary rules.

RBI has issued Master Direction on 'Frauds - Classification and reporting' vide RBI. DBS.CFMC.BC.No.1 / 23.04.001/2016 -17 dated July 01, 2016 containing all the details/aspects  relating  to  frauds.  On  receipt  of  fraud  reports  from  banks,  various aspects related to the frauds are examined and concerned banks are advised to report the  case  to  CBI/  Police/  SFIO,  examine  staff  accountability,  complete  proceedings against the erring staff expeditiously, take steps to recover the amount involved in the fraud, claim insurance wherever applicable and streamline the system  as also procedures so that frauds do not recur. To compress the time taken in detection of fraud, a framework for handling loan frauds has been put in place. The framework stipulates continuous monitoring of loan accounts, time bound actions at each stage of loan's life cycle  and  commencement  of  investigations  on  observing  early  warning  signal  in  an account. Further the framework has also prohibited banks from extending bank finance to borrowers who have defaulted and also committed a fraud for five years from the date of full payment of the defrauded amount.

- *****

ANNEX -1

| Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   |
|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|
| State / UT wise                                       | 2013-14                                               | 2013-14                                               | 2014-15                                               | 2014-15                                               | 2015-16                                               | 2015-16                                               | April 2016-June 2016                                  | April 2016-June 2016                                  |
|                                                       | No of cases                                           | Amount involved Rs in crore                           | No of cases                                           | Amount involved Rs in crore                           | No of cases                                           | Amount involved Rs in crore                           | No of cases                                           | Amount involved Rs in crore                           |
| Andaman & Nicobar Islands                             | 1                                                     | 0.98                                                  | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  |
| Andhra Pradesh                                        | 188                                                   | 713.86                                                | 165                                                   | 926.46                                                | 186                                                   | 1035.35                                               | 55                                                    | 45.80                                                 |
| Arunachal Pradesh                                     | 1                                                     | 0.05                                                  | 1                                                     | 0.09                                                  | 0                                                     | 0.00                                                  | 2                                                     | 2.19                                                  |
| Assam                                                 | 23                                                    | 14.80                                                 | 36                                                    | 5.69                                                  | 30                                                    | 4.71                                                  | 6                                                     | 1.51                                                  |
| Bihar                                                 | 70                                                    | 11.96                                                 | 106                                                   | 65.44                                                 | 133                                                   | 44.93                                                 | 19                                                    | 5.34                                                  |
| Chandigarh                                            | 16                                                    | 820.69                                                | 30                                                    | 228.24                                                | 20                                                    | 185.11                                                | 3                                                     | 56.98                                                 |
| Chhattisgarh                                          | 32                                                    | 4.68                                                  | 36                                                    | 9.45                                                  | 24                                                    | 4.86                                                  | 19                                                    | 76.74                                                 |
| Dadra&Nagar Haveli                                    | 4                                                     | 0.21                                                  | 1                                                     | 0.07                                                  | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  |
| Daman & Diu                                           | 0                                                     | 0.00                                                  | 1                                                     | 0.09                                                  | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  |
| Delhi                                                 | 304                                                   | 2215.28                                               | 335                                                   | 1178.89                                               | 293                                                   | 1947.30                                               | 83                                                    | 1017.43                                               |
| Goa                                                   | 11                                                    | 4.88                                                  | 5                                                     | 1.51                                                  | 13                                                    | 4.56                                                  | 4                                                     | 3.64                                                  |
| Gujarat                                               | 106                                                   | 442.34                                                | 108                                                   | 1189.32                                               | 119                                                   | 1905.03                                               | 36                                                    | 179.45                                                |
| Haryana                                               | 52                                                    | 74.85                                                 | 76                                                    | 85.97                                                 | 59                                                    | 42.54                                                 | 10                                                    | 1.55                                                  |
| Himachal Pradesh                                      | 10                                                    | 4.54                                                  | 10                                                    | 6.78                                                  | 14                                                    | 5.75                                                  | 1                                                     | 0.12                                                  |
| Jammu & Kashmir                                       | 8                                                     | 0.63                                                  | 14                                                    | 3.03                                                  | 6                                                     | 1.15                                                  | 12                                                    | 6.92                                                  |
| Jharkhand                                             | 107                                                   | 46.18                                                 | 107                                                   | 25.98                                                 | 40                                                    | 18.63                                                 | 18                                                    | 6.00                                                  |
| Karnataka                                             | 112                                                   | 284.06                                                | 241                                                   | 131.47                                                | 243                                                   | 318.02                                                | 42                                                    | 259.50                                                |
| Kerala                                                | 61                                                    | 33.55                                                 | 62                                                    | 71.01                                                 | 47                                                    | 12.21                                                 | 20                                                    | 2.07                                                  |
| Lakshadweep                                           |                                                       | 0.00                                                  | 1                                                     | 0.97                                                  | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  |
| Madhya Pradesh                                        | 86                                                    | 71.43                                                 | 71                                                    | 30.32                                                 | 85                                                    | 180.79                                                | 25                                                    | 30.52                                                 |
| Maharashtra                                           | 390                                                   | 1136.32                                               | 407                                                   | 4887.46                                               | 372                                                   | 6192.60                                               | 110                                                   | 947.47                                                |
| Manipur                                               | 1                                                     | 0.51                                                  | 3                                                     | 4.86                                                  | 1                                                     | 0.96                                                  | 2                                                     | 0.73                                                  |
| Meghalaya                                             | 2                                                     | 0.17                                                  | 7                                                     | 0.66                                                  | 4                                                     | 0.16                                                  | 1                                                     | 0.08                                                  |
| Mizoram                                               |                                                       | 0.00                                                  | 2                                                     | 0.17                                                  | 3                                                     | 0.07                                                  | 3                                                     | 2.00                                                  |
| Nagaland                                              |                                                       | 0.00                                                  | 3                                                     | 0.81                                                  | 63                                                    | 14.35                                                 | 16                                                    | 65.77                                                 |
| Orissa                                                | 136                                                   | 63.35                                                 | 88                                                    | 100.04                                                | 9                                                     | 1.81                                                  | 0                                                     | 0.00                                                  |
| Pondicherry                                           |                                                       | 0.00                                                  | 4                                                     | 0.34                                                  | 130                                                   | 156.31                                                | 19                                                    | 22.10                                                 |
| Punjab                                                | 122                                                   | 253.33                                                | 157                                                   | 168.80                                                | 58                                                    | 1109.18                                               | 16                                                    | 13.56                                                 |
| Rajasthan                                             | 57                                                    | 8.55                                                  | 73                                                    | 50.42                                                 | 1                                                     | 0.03                                                  | 0                                                     | 0.00                                                  |
| Sikkim                                                |                                                       | 0.00                                                  | 1                                                     | 0.18                                                  | 219                                                   | 1249.14                                               | 37                                                    | 105.28                                                |
| Tamil Nadu                                            | 147                                                   | 424.98                                                | 252                                                   | 1773.37                                               | 4                                                     | 0.76                                                  | 0                                                     | 0.00                                                  |
| Uttar Pradesh                                         | 278                                                   | 124.07                                                | 344                                                   | 273.17                                                | 330                                                   | 277.21                                                | 117                                                   | 36.27                                                 |
| Uttaranchal                                           | 36                                                    | 40.91                                                 | 45                                                    | 19.72                                                 | 27                                                    | 4.94                                                  | 6                                                     | 11.14                                                 |
| West Bengal                                           | 224                                                   | 742.29                                                | 302                                                   | 5495.64                                               | 227                                                   | 1810.75                                               | 67                                                    | 1080.25                                               |
| Overseas                                              | 5                                                     | 2.80                                                  |                                                       |                                                       |                                                       |                                                       |                                                       |                                                       |
| Branch                                                |                                                       |                                                       | 19                                                    | 64.18                                                 | 20                                                    | 154.88                                                | 9                                                     | 56.89                                                 |

| Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   | Fraud cases of Rs 1 lakh and above reported by PSBs   |
|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|-------------------------------------------------------|
| Bank Name                                             | 2013-14                                               | 2013-14                                               | 2014-15                                               | 2014-15                                               | 2015-16                                               | 2015-16                                               | April 2016-June 2016                                  | April 2016-June 2016                                  |
| Bank Name                                             | No of cases                                           | Amount involved Rs in crore                           | No of cases                                           | Amount involved Rs in crore                           | No of cases                                           | Amount involved Rs in crore                           | No of cases                                           | Amount involved Rs in crore                           |
| Allahabad Bank                                        | 95                                                    | 618.06                                                | 47                                                    | 75.98                                                 | 23                                                    | 290.91                                                | 6                                                     | 5.30                                                  |
| Andhra Bank                                           | 38                                                    | 214.30                                                | 52                                                    | 511.48                                                | 44                                                    | 250.39                                                | 19                                                    | 115.73                                                |
| Bank of Baroda                                        | 204                                                   | 453.16                                                | 303                                                   | 1226.02                                               | 255                                                   | 1666.09                                               | 74                                                    | 107.51                                                |
| Bank of India                                         | 100                                                   | 226.90                                                | 131                                                   | 92.44                                                 | 156                                                   | 1217.58                                               | 48                                                    | 268.22                                                |
| Bank of Maharashtra                                   | 33                                                    | 21.54                                                 | 50                                                    | 239.06                                                | 45                                                    | 1307.73                                               | 24                                                    | 292.82                                                |
| BharatiyaMahila Bank Ltd.                             | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  | 0                                                     | 0.00                                                  | 3                                                     | 0.45                                                  |
| Canara Bank                                           | 81                                                    | 180.30                                                | 114                                                   | 177.29                                                | 94                                                    | 1589.71                                               | 42                                                    | 341.65                                                |
| Central Bank of India                                 | 156                                                   | 823.29                                                | 214                                                   | 2149.72                                               | 164                                                   | 177.06                                                | 43                                                    | 189.86                                                |
| Corporation Bank                                      | 77                                                    | 278.28                                                | 73                                                    | 1222.09                                               | 135                                                   | 1321.99                                               | 13                                                    | 37.96                                                 |
| Dena Bank                                             | 36                                                    | 162.81                                                | 41                                                    | 400.16                                                | 21                                                    | 71.02                                                 | 12                                                    | 219.48                                                |
| IDBI Bank Limited                                     | 92                                                    | 625.54                                                | 56                                                    | 557.95                                                | 129                                                   | 262.05                                                | 28                                                    | 2.59                                                  |
| Indian Bank                                           | 54                                                    | 43.49                                                 | 95                                                    | 91.04                                                 | 87                                                    | 138.06                                                | 24                                                    | 51.52                                                 |
| Indian Overseas Bank                                  | 125                                                   | 484.73                                                | 138                                                   | 574.36                                                | 106                                                   | 597.85                                                | 31                                                    | 376.07                                                |
| Oriental Bank of Commerce                             | 92                                                    | 53.52                                                 | 127                                                   | 764.84                                                | 114                                                   | 807.30                                                | 18                                                    | 19.70                                                 |
| Punjab & Sind Bank                                    | 29                                                    | 69.67                                                 | 30                                                    | 39.16                                                 | 12                                                    | 131.94                                                | 4                                                     | 2.05                                                  |
| Punjab National Bank                                  | 239                                                   | 558.38                                                | 180                                                   | 2309.73                                               | 131                                                   | 352.85                                                | 36                                                    | 350.88                                                |
| State Bank of Bikaner & Jaipur                        | 43                                                    | 148.93                                                | 41                                                    | 462.13                                                | 48                                                    | 147.75                                                | 9                                                     | 7.14                                                  |
| State Bank of Hyderabad                               | 27                                                    | 365.08                                                | 31                                                    | 68.65                                                 | 34                                                    | 673.63                                                | 7                                                     | 50.80                                                 |
| State Bank of India                                   | 549                                                   | 906.18                                                | 651                                                   | 1615.18                                               | 562                                                   | 1882.46                                               | 151                                                   | 601.05                                                |
| State Bank of Mysore                                  | 20                                                    | 92.83                                                 | 97                                                    | 90.75                                                 | 67                                                    | 21.73                                                 | 15                                                    | 5.73                                                  |
| State Bank of Patiala                                 | 40                                                    | 98.85                                                 | 39                                                    | 290.30                                                | 40                                                    | 413.06                                                | 11                                                    | 3.27                                                  |
| State Bank of Travancore                              | 33                                                    | 116.48                                                | 34                                                    | 236.23                                                | 19                                                    | 138.88                                                | 7                                                     | 0.50                                                  |
| Syndicate Bank                                        | 102                                                   | 132.72                                                | 208                                                   | 793.10                                                | 175                                                   | 1430.89                                               | 47                                                    | 117.89                                                |
| UCO Bank                                              | 56                                                    | 364.24                                                | 87                                                    | 1410.98                                               | 85                                                    | 248.15                                                | 19                                                    | 411.56                                                |
| Union Bank of India                                   | 85                                                    | 92.09                                                 | 111                                                   | 369.83                                                | 146                                                   | 1297.73                                               | 31                                                    | 353.83                                                |
| United Bank of India                                  | 125                                                   | 348.98                                                | 128                                                   | 680.35                                                | 67                                                    | 142.67                                                | 8                                                     | 81.80                                                 |
| Vijaya Bank                                           | 59                                                    | 61.87                                                 | 35                                                    | 351.74                                                | 21                                                    | 104.65                                                | 28                                                    | 21.94                                                 |

<!-- image -->

Annex-2

| Fraud cases of Rs 1 lakh and above reported by PSBs where staff is involved at the time of initial reporting from April 2013 to June 2016   | Fraud cases of Rs 1 lakh and above reported by PSBs where staff is involved at the time of initial reporting from April 2013 to June 2016   | Fraud cases of Rs 1 lakh and above reported by PSBs where staff is involved at the time of initial reporting from April 2013 to June 2016   |
|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| State / UT wise                                                                                                                             | No of cases                                                                                                                                 | Amount involved Rs in crore                                                                                                                 |
| Andhra Pradesh                                                                                                                              | 157                                                                                                                                         | 148.41                                                                                                                                      |
| Arunachal Pradesh                                                                                                                           | 1                                                                                                                                           | 0.05                                                                                                                                        |
| Assam                                                                                                                                       | 23                                                                                                                                          | 6.65                                                                                                                                        |
| Bihar                                                                                                                                       | 55                                                                                                                                          | 27.32                                                                                                                                       |
| Chandigarh                                                                                                                                  | 3                                                                                                                                           | 253.44                                                                                                                                      |
| Chhattisgarh                                                                                                                                | 13                                                                                                                                          | 2.82                                                                                                                                        |
| Delhi                                                                                                                                       | 37                                                                                                                                          | 188.22                                                                                                                                      |
| Goa                                                                                                                                         | 2                                                                                                                                           | 2.59                                                                                                                                        |
| Gujarat                                                                                                                                     | 43                                                                                                                                          | 16.49                                                                                                                                       |
| Haryana                                                                                                                                     | 27                                                                                                                                          | 4.76                                                                                                                                        |
| Himachal Pradesh                                                                                                                            | 5                                                                                                                                           | 0.81                                                                                                                                        |
| Jammu & Kashmir                                                                                                                             | 14                                                                                                                                          | 6.36                                                                                                                                        |
| Jharkhand                                                                                                                                   | 20                                                                                                                                          | 3.61                                                                                                                                        |
| Karnataka                                                                                                                                   | 125                                                                                                                                         | 89.34                                                                                                                                       |
| Kerala                                                                                                                                      | 50                                                                                                                                          | 30.53                                                                                                                                       |
| Madhya Pradesh                                                                                                                              | 47                                                                                                                                          | 23.30                                                                                                                                       |
| Maharashtra                                                                                                                                 | 107                                                                                                                                         | 110.43                                                                                                                                      |
| Manipur                                                                                                                                     | 5                                                                                                                                           | 6.11                                                                                                                                        |
| Meghalaya                                                                                                                                   | 5                                                                                                                                           | 0.47                                                                                                                                        |
| Mizoram                                                                                                                                     | 1                                                                                                                                           | 0.14                                                                                                                                        |
| Nagaland                                                                                                                                    | 7                                                                                                                                           | 2.20                                                                                                                                        |
| Orissa                                                                                                                                      | 38                                                                                                                                          | 20.71                                                                                                                                       |
| Pondicherry                                                                                                                                 | 4                                                                                                                                           | 0.56                                                                                                                                        |
| Punjab                                                                                                                                      | 37                                                                                                                                          | 59.28                                                                                                                                       |
| Rajasthan                                                                                                                                   | 38                                                                                                                                          | 1096.39                                                                                                                                     |
| Tamil Nadu                                                                                                                                  | 170                                                                                                                                         | 83.09                                                                                                                                       |
| Tripura                                                                                                                                     | 1                                                                                                                                           | 0.10                                                                                                                                        |
| Uttar Pradesh                                                                                                                               | 106                                                                                                                                         | 53.84                                                                                                                                       |
| Uttaranchal                                                                                                                                 | 13                                                                                                                                          | 3.06                                                                                                                                        |
| West Bengal                                                                                                                                 | 69                                                                                                                                          | 166.92                                                                                                                                      |
| Overseas Branch                                                                                                                             | 9                                                                                                                                           | 41.59                                                                                                                                       |

******************