Banking frauds in India are so frequent and rampant that they no longer surprise most people. For example, take the last financial year, 2020-21, during which more than 83,000 banking frauds took place that syphoned off Rs 1.38 lakh crore. The recoveries during the same period amount to a little over Rs 1,000 crore, less than one per cent of the outflow.
In 2020-21, 229 frauds on average happened every day.
One may, however, want to take some solace: this was a slight improvement over the figures from the previous financial year (2019-20) when the country witnessed 231 banking frauds every day.
In 2019-20, Rs 1.85 lakh crore was fraudulently taken away from banks and only 8.7 per cent could be recovered.
All these figures were revealed by the Reserve Bank of India (RBI) in response to a Right to Information (RTI) query filed by India Today.
OTHER INTERESTING FACTS IN RBI RESPONSE
In the seven financial years, between 2014-15 and 2020-21, of the Narendra Modi-led National Democratic Alliance (NDA) government, Rs 5.99 lakh crore was lost by the banks in 2,84,819 fraud cases. The recovery during this period amounted to Rs 49,000 core or 9.8% of the total lost.
In the preceding seven financial years, between 2007-08 to 2013-14, when the Manmohan Singh-led United Progressive Alliance (UPA) government was in power, 29,451 cases of banking frauds were reported in which Rs 31,674 crore was syphoned off. The recovery in this period amounted to Rs 7493 crore or 23.7% of the total fraud.
If we add up the fraud figures for these 14 years, 2007-08 to 2020-21, we arrive at a stupendous figure of 3,14,270 cases of financial fraud in which Rs 530571.55 crore was taken away and only Rs 56502.91 recovered.
A comparison between NDA years and UPA years shows 90.6 per cent banking frauds took place under the former, while 9.4% was during the UPA government.
In terms of amount taken away, 94 percent of the total was scammed during the NDA and 6 per cent during the UPA.
When it comes to the recovery rate, during the UPA’s tenure, it was 23.7 per cent and 9.8 per cent during the NDA regime.
There was a quantum jump in the number of banking frauds after the 2016 demonetisation. An obvious digital push in the midst of a cash crunch in the system could have been the reason for that. It is quite likely that most of the frauds are happening online now.
On Nov 19, 2019, Finance Minister Nirmala Sitharaman said in the Rajya Sabha that “Government has taken comprehensive measures to curb the incidence of fraud in banks” but her statement is not borne out by the statistics provided by the Reserve Bank of India in response to our RTI.