Fraud cases reported by banks and financial institutions increased but in value terms this more than halved in 2021-22, the Reserve Bank of India’s annual report showed.

Fraud instances rose 23.69% to 9,103 in 2021-22 versus 7,359 in the year-ago period. The year 2020-21 had, in fact, seen a fall in the number of frauds over the previous year which reported 8,703 cases.

In value terms, the total amount involved in frauds fell to Rs 60,414 crore, from Rs 1.38 lakh crore in 2020-21 and Rs 1.85 lakh crore in 2019-20.  The RBI data considers frauds of Rs 1 lakh and above only.

“An assessment of bank group-wise fraud cases over the last three years indicates that while private sector banks reported maximum number of frauds, public sector banks (PSBs) contributed maximum to the fraud amount. Frauds have been occurring predominantly in the loan portfolio (advances category), both in terms of number and value,” the central bank said in its assessment.

The RBI takes into account the frauds from state-owned banks, private banks, foreign banks, financial institutions, small finance banks, payment banks and local area banks.

In 2021-22, PSBs reported 3,078 frauds amounting to Rs 40,282 crore. A year ago, the state-owned lenders had reported 2,901 frauds amounting to Rs 81,901 crore.

Private sector lenders, on the other hand, reported 5,334 frauds in 2021-22, up from 3,710 a year ago. The total amount involved in these frauds, however, was much lower at Rs 17,588 crore last year compared to Rs 46,335 crore in the year prior to that.

The number of frauds reported by private sector banks were mainly on account of small value card/ internet frauds. In case of PSBs, the fraud amount was mainly in loan portfolio, RBI said in its report.

In the number of frauds, advances constituted 42.2% and in value terms it was almost 97% at Rs 58,328 crore. Cards/internet constituted 39.5% of the number of frauds but in value terms it was just 0.2%.

The RBI also pointed out a significant gap between when the fraud occurred and when it was actually detected.

“An analysis of the vintage of frauds reported during 2020-21 and 2021-22 shows a significant time-lag between the date of occurrence of a fraud and its detection. 93.73 per cent of the frauds in 2021-22 by value occurred in previous financial years as against 91.71 per cent recorded in 2020-21,” it said in the annual report.