While the Indian economy is facing slowdown and Indian banks are facing liquidity crunch, here comes an alarming update about state-run banks.
In a statement on November 19, 2019, the Finance Ministry said the country’s state-run banks reported 5,743 frauds worth Rs. 95,760 crore (USD 13 billion) during April-September 2019.
While majority of these were performed over the past years, 1,000 cases worth RS 25 billion happened during this 6-month period, Nirmala Sitharaman told the Upper House.
“Government has taken comprehensive measures to curb the incidence of fraud in banks,” the Minister said in a statement.
SBI tops the list reporting frauds worth Rs 254 billion, followed by Punjab National Bank (Rs 108 billion) and Bank of Baroda (Rs 83 billion).
While a few bankers are blaming taxation rules, a few are working on legal procedures against fraudsters.
It is noteworthy here that the Indian Government has introduced the bankruptcy and insolvency law in 2016 and fugitive economic offenders law later to assist banks in recovering losses from fraud worth USD 140 billion.
The country second largest state-run bank Punjab National Bank reports more than USD 2 billion loss through frauds in 2018, primarily attributing that to a few employees who reportedly issued fake bank guarantees favoring jewelry groups raise funds in foreign credit.
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