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Number of frauds in banking sector rose in FY23, reveals RBI data

Written by  Shgun S -- May 30th 2023 09:16 PM
Number of frauds in banking sector rose in FY23, reveals RBI data

Number of frauds in banking sector rose in FY23, reveals RBI data

Mumbai, May 30: The number of banking frauds increased year on year to 13,530 in 2022-23, but the amount involved nearly halved to Rs 30,252 crore, according to Reserve Bank data released on Tuesday.

According to the Reserve Bank's Annual Report 2022-23, the majority of frauds occurred in the category of digital payments (card/internet).

In terms of value, however, frauds have mostly been reported in the loan portfolio (advances category).

In 2021-22, a total of 9,097 frauds of Rs 59,819 crore were committed. In 2020-21, there were 7,338 frauds with a total value of Rs 1,32,389 crore.

“An assessment of bank group-wise fraud cases over the last three years indicates that while private sector banks reported maximum number of frauds, public sector banks continued to contribute maximum to the fraud amount during 2022-23,” the report informed.

The data pertains to frauds of Rs 1 lakh or more that were recorded over the course of three years.

According to the data, the amount involved in overall frauds reported during 2021-22 decreased by 55% compared to 2020-21.

Furthermore, the fall in the overall amount involved in frauds continued in 2022-23, with a reduction of 49% compared to 2021-22.

“While small value card/internet frauds contributed maximum to the number of frauds reported by the private sector banks, the frauds in public sector banks were mainly in the loan portfolio,” the RBI added.

It said that frauds recorded in a given year could have occurred several years before the reporting year.

The central bank further stated that a review of the vintage of frauds recorded during 2021-22 and 2022-23 reveals a substantial time gap between the date of occurrence and detection of a scam.

In terms of value, the amount involved in prior fiscal years' frauds accounted for 93.7 percent of the frauds reported in 2021-22.

Similarly, by value, 94.5 percent of the frauds reported in 2022-23 occurred in previous fiscal years.

While public sector banks reported 3,405 frauds totalling Rs 21,125 crore in 2022-23, private banks recorded 8,932 incidents totalling Rs 8,727 crore. The remaining came from foreign banks, financial institutions, small finance banks, and payment banks.

According to the data, 95 per cent or Rs 28,792 crore of the total Rs 30,252 crore was reported in cases related to loans (advances).

- With inputs from agencies


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