Home National Indian banks lose Rs. 1.6crore every hour to cheating, forgery accounts

Indian banks lose Rs. 1.6crore every hour to cheating, forgery accounts


(G.N.S) DT.15

Indian banks reportedly lose Rs 1.6 crore every hour to cheating and forgery, rather surprisingly.

The Reserve Bank of India (RBI) lists eight categories of frauds, out of which just one- cheating and forgery- accounts for a little more than 60% of all money lost by banks.

Due to this, Indian banks lost a total of Rs. 42,276 crore in 2014-15, 2015-16 and 2016-17.

Of the Rs. 42,276 crore lost to cheating and forgery, Rs. 37,583 crore or 89% was lost by public sector banks (PSBs), while Rs. 4,683 crore was lost by private banks.

The State Bank of India lost the highest amount of Rs. 5,743 crore, solely accounting for 15% of the total money lost by PSBs.

Such cases cannot happen without insider involvement

“This kind of fraud, on this scale, cannot take place without insider involvement. Data show these are clearly not stray cases which means the system needs to be evaluated more carefully now,” Tobby Simon of Synergia Foundation, a multi-disciplinary think-tank based in Bengaluru, said.

Further, out of the 7,505 cases that the money was lost in the three years, 4,702 cases were reported by PSBs, while 2,803 cases happened with private banks.

Such cases of fraud usually involve obtaining loans using forged documents or cheating by making false claims.

It points to a major vulnerability in the system due to lack of training and a robust security framework.

Only frauds of over Rs. 1 lakh have been considered

Money lost due to cheating and forgery accounts for 60% of all eight frauds in the three years. Notably, the cases considered only involved fraud of over Rs. 1 lakh. Fraud involving lesser money has reportedly cost the banks at least another few hundred crores.



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