Financial frauds reported by banks decreased by 15 percent in numbers and by 25 percent in total value terms compared to the previous financial year, the Reserve Bank of India (RBI) Annual Report showed. The value of bank financial frauds fell to Rs 1.38 lakh crore and the number of cases decreased to 7,363 by the end of March 2021.

There was a noticeable decrease in the share (both in terms of number and value) of frauds involving public sector banks. However, there was a significant increase in frauds n the private banking sector, which includes both Indian and foreign banks as well as NBFCs.

In terms of value, financial frauds in public sector banks amounted to Rs 81,901 crore, while in private sector banks it was at Rs 46,335 crore. The number of frauds involving online banking shot up 34.6 percent at the end of March 2021.

According to the central bank’s Annual Report, RBI will be focusing on improving the on-site assessment capability of oversight and assurance functions. It would also look to adopt innovative and scalable supervisory technology.

RBI has also set out the agenda of streamlining data collection processes from all banks while also improving on-site supervision of select banks based on risk models developed for the purpose.

The RBI Annual Report mentioned that the central bank will enhance “the fraud risk management system, including improving the efficacy of the early warning signal (EWS) framework, strengthening fraud governance and response system, augmenting data analysis for monitoring of transactions, introduction of a dedicated market intelligence (MI) unit for frauds and implementation of an automated unique system generated number for each fraud.”

The latest Annual Report from India’s central bank saw its expenditure decrease by 63.10 percent, and its earnings from foreign exchange sales rise by 69 percent. The bank also clearly highlighted the importance of continued liquidity in key sectors for economic revival and the need for higher private consumption. It stressed the need for investment for long-term economic growth in the post-COVID-19 scenario.

(Edited by : Shoma)

First Published:May 27, 2021 6:45 PM IST