Gangadhar S Patil, ET Bureau Feb 20, 2014, 08.49AM IST | Economic Times

NEW DELHI: Indian banks lost as much as Rs 17,284 crore during 2012-13 due to fraud, in a near four-fold jump over the previous fiscal, ET has found out from information obtained through Right to Information Act.

At a time when the lenders were reeling under burgeoning non-performing assets, 62 banks filed a total of 26,598 cases involving a sum equivalent to, for example, three years’ budget of Indian Space Research Organisation.

Many of these cases are being investigated by the CBI or the state police. Although private banks account for about 75% of the total number of cases registered, these lenders lost Rs 970 crore while the state-run banks lost as much as Rs 16,314 crore during the year. In comparison, all banks put together lost Rs 4,448 crore to frauds during 2011-12.

According to the data, Punjab National Bank was the worst hit, with cases of fraud involving Rs 1,375 crore while Canara Bank lost Rs 1,166 crore. Other public sector banks that lost more than Rs 1,000 crore include State Bank of India, Bank of India and Oriental Bank of Commerce.

Among the private sector banks, ICICI Bank topped the list with 5,280 cases of fraud, followed by Citibank and Standard Chartered bank, with 2,934 and 2,568 cases, respectively. These three banks together lost Rs 187 crore.

Several banks disputed the figures furnished by the Reserve Bank of India under the RTI Act.

Canara Bank’s spokesperson said the bank had reported 78 cases of fraud amounting to Rs 583 crore while the central bank’s data puts the figures at 156 cases and Rs 1,166 crore. Similarly, Standard Chartered Bank in its official response said it lost Rs 18.85 core in 1,284 cases while the RBI said the bank had lost Rs 37 crore in 2,568 cases. Citibank and PNB also disagreed with the data.

“The information you have provided is not in accordance with our records, and significantly overstates both the number and the value of the cases,” said a Citibank spokesperson. RBI did not respond to detailed query mailed by ET in this regard.

The central bank had in July 2012 issued detailed guidelines to banks on how to report and tackle fraud cases. The guidelines specify seven different forms of fraud such as misappropriation, fraudulent encashment, cheating and forgery, and irregularities in foreign exchange transactions, among others.

“Incidence of frauds, dacoities, robberies, etc, in banks is a matter of concern. While the primary responsibility for preventing frauds lies with banks themselves, the Reserve Bank of India (RBI) has been advising them from time to time about the major fraud-prone areas and the safeguards necessary for their prevention,” said the circular.

Earlier, in March 2009 the central bank had directed all the banks to report names of professionals who facilitated the perpetration of fraud to the Indian Banks Association (IBA). The IBA prepares a “caution list” of such people that is circulated among banks.

However, the data for 2012-13 reveals that such efforts have failed to save banks from the rapid rise in incidents of fraud.

Source : http://goo.gl/zWqN65