Banking frauds involving sums of over Rs 100 crore have seen a significant fall, with reported cases dropping to amounts worth Rs 41,000 crore in 2021-22 compared from Rs 1.05 lakh crore a year ago. 

The number of fraud cases in private as well as public sector banks have fallen to 118 in FY22 from 265 in 2020-21.

The total number of fraud cases in case of public sector banks has more than halved to 80 from 167 in FY21. Private sector banks have seen a sharper fall with the fraud cases dropping to 38 in FY22 from 98 a year ago, official data showed.

A similar trend is visible in case of cumulative amount, with the figure dropping to Rs 28,000 crore from Rs 65,900 crore in FY21 for public sector banks. In case of private sector banks, this has dropped to Rs 13,000 crore in FY22 from Rs 39,900 crore a year ago.

The reserve Bank of India (RBI) has taken several steps to check frauds, including improving efficacy of Early Warning System (EWS) framework, strengthening fraud governance and response system, augmenting data analysis for monitoring of transactions and introduction of dedicated Market Intelligence (MI) Unit for frauds.

During 2021-22, the RBI conducted a study on the implementation of EWS framework in select scheduled commercial banks, in collaboration with the Reserve Bank Information Technology Private Limited (ReBIT).

The effectiveness of EWS was further assessed in select banks by using Machine Learning (ML) algorithms.

Earlier this year, State Bank of India (SBI) reported one of the biggest bank frauds in the country amounting to Rs 22,842 crore, conducted by ABG Shipyard and their promoters. This was much higher than the case involving Nirav Modi and his uncle Mehul Choksi, who allegedly cheated Punjab National Bank (PNB) of around Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).

Last month, the Central Bureau of Investigation (CBI) booked Dewan Housing Finance Ltd (DHFL), its former CMD Kapil Wadhawan, director Dheeraj Wadhawan and others in a fresh case involving Rs 34,615 crore, making it the biggest bank fraud probed by the agency.

A consortium of lenders led by Union Bank of India has alleged that the company had availed credit facility to the tune of Rs 42,871 crore between 2010 and 2018 from the consortium under various arrangements but started defaulting on repayments from May 2019 onwards.

The accounts were declared non-performing assets at different points of time by banks, news agency PTI reported. The bank alleged that the promoters along with others siphoned off and misappropriated a significant portion of the funds by falsifying the books of DHFL and dishonestly defaulted on repayment of dues.

This caused a loss of Rs 34,615 crore to the 17 banks in the consortium.