Every 4 Hours, 1 Bank Staffer Caught For Fraud: RBI Data

| February 18 , 2018 , 08:47 IST

The massive fraud that took place at the Punjab National Bank (PNB) brought into the limelight instances of fraud taking place at banks in India. An analysis of data by the Reserve Bank of India of bank employees involved in fraud has shown that on an average every 4 hours at least 1 banker is caught and punished for involvement in fraud.

From January 1, 2015, to March 31, 2017, around 5,200 officials of public sector banks have been punished for fraud.

"These employees have been convicted, awarded penalties, including dismissal from service," the RBI document quoted by TOI states.

ALSO READ: PNB Scam: CBI Arrests Bank's Ex-Deputy Manager Gokulnath Shetty

The most bank officials facing action for fraud are from the State Bank of India with 1,538 bankers, followed by Indian Overseas Bank with 449 officials and Central Bank of India with 406 officials being found guilty.

Over the same period of time, 184 officials from the Punjab National Bank (PNB) were also caught for involvement in fraudulent activities, however, keeping in view the recent massive fraud that took place in the Nirav Modi issue, it's possible there were more PNB officials involved in fraud.

Although the data does not reveal the financial losses that the banks suffered due to insiders involved in fraud, separate data from the RBI for the period between April 1, 2013, and December 31, 2016, shows that all commercial banks lost a total of Rs 66,066 crore due to 17,504 instances of fraud.

ALSO READ: Punjab National Bank Reports Nearly $1.8 Billion Fraud At A Mumbai Branch

From the total number of fraud instances, only 2,084 cases had the involvement of insiders.

Concerned with the large number of frauds taking place in banks due to insiders, the RBI has been issuing circulars to banks on how to effectively report cases and put in place mechanisms to prevent such incidences.

"To compress the time taken in detection of fraud, a framework for handling loan frauds has been put in place," said a RBI circular from July 2016.