Are the Steps to Curb the Rising Menace of Bank Frauds in India Good Enough?
Namratha Prasad
In a report published by India’s central bank – The Reserve Bank of India, it was stated that bank frauds in India rose by an astounding 73.8% in value in 2018-19, when compared to the previous year. In terms of number of cases, it was up by 15% for the same period (Source: Bank Frauds Rise 74%, says RBI,, August 29, 2019).

On an average, the lag between the date of occurrence of the fraud and the detection by banks was stated to be 22 months, while the banks were found to have taken 55 months (2 years) on an average to report large frauds. The report further stated that large frauds, primarily involving funds of more than Rs.100 crore, took banks nearly four and a half years to detect. Public sector banks were said to have accounted for the bulk of frauds, followed by private sector banks and foreign banks. While cheating and forgery constituted for a large portion of the frauds, misappropriation of funds and criminal breach of trust were also reported in large numbers.

RBI further stated that to curb the rising menace of bank frauds, it was collaborating with various agencies including the Ministry of Corporate Affairs to develop an interlinked database, which would enable fraud monitoring. It was also stated to have undertaken the task of creating a more robust monitoring system, by enhancing the existing technologies – analytic engines of banks and the user interface of the fraud registry.

Furthermore, the RBI report claimed that the central bank itself had subjected 57 banks to an IT examination to check their cyber security preparedness and compliances. In addition, it was said to have undertaken targeted thematic examinations focused on applications, infrastructure and systems used by the banks. What remains to be seen is will these measures curb the rising menace of bank frauds?

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