Big-time fraud hits public sector banks, govt pegs loss at mammoth Rs 6,457 cr in 2012

P Chidambaram

Fraud cases involving an amount of Rs 6,457 crore have been reported by public sector banks (PSBs) in 2012, Finance Minister P Chidambaram said in a written reply to the Rajya Sabha.

This was much more than Rs 3,850 crore reported in 2011, the Minister said.

Chidambaram was replying to a question about the details of scams that took place in banks.

Indian Overseas Bank (IOB) reported fraud cases involving an amount Rs 758 crore so far in 2012, followed by Punjab National Bank (PNB) which reported fraud cases involving an amount Rs 728 crore.

On measures taken to prevent/reduce incidences of frauds, Chidambaram said, "RBI is sensitising banks from time to time about common fraud prone areas through issuance of modus operandi circulars on various types of frauds."

He further said RBI has advised banks to introduce a system of concurrence audit and constitute a Special Committee of the Board to exclusively monitor frauds of Rs 1 crore and above.

In a separate written reply to Rajya Sabha, Minister of State for Finance Namo Narayan Meena said, "total number of fraud cases during the FY 2011-12 stood at 204 involving an amount of Rs 6,600 crore for the financial services sector."

The exposure to banking sector in this regard stood at Rs 3,505 crore, Meena added citing the report of Ernst and Young.

The Reserve Bank had issued detailed instructions relating to frauds in its master circular in July 1, 2012 titled "Frauds-Classification and Reporting" containing all the details.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.