According to Reserve Bank of India data, in the nine months ending December, 96 incidences of fraud were recorded by 27 scheduled commercial banks and financial institutions, totaling Rs 34,097 crore. Punjab National Bank had the greatest amount of frauds at Rs 4,820 crore, while Bank of India had the highest number of frauds at 13.
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- This penalty was issued in accordance with RBI’s authority under section 47A (1) (c) of the Banking Regulation Act, 1949, as well as sections 46(4)(i) and 51(1).
- This action is based on regulatory compliance issues and is not meant to be a judgement on the legitimacy of any transaction or agreement between the bank and its customers.
- Minister of State for Finance Bhagwat Karad responded to a query in the Rajya Sabha during the budget session of parliament by giving bank-by-bank data of frauds totaling more than Rs 100 crore. Between April and December, scheduled commercial banks and select financial institutions reported these.
- The RBI’s master guidelines emphasise fraud prevention, early detection, rapid reporting, and prompt start of accountability processes in the case of fraud. In his response, the minister stated that, in addition to the master directives, a number of steps have been implemented to prevent fraudsters and defaulters. That includes:
- The Fugitive Economic Offenders Act of 2018 authorises the attachment of a fugitive economic offender’s property. Such possessions may be seized, and the perpetrator may be disentitled, making it impossible for them to defend any legal claim.
- Public sector bank heads have been given the authority to seek the issuing of lookout circulars.
- Based on RBI directives and board-approved regulations, public sector banks can elect to publish images of willful defaulters.
- PSBs can acquire certified copies of the passports of the proprietors or directors, as well as other approved signatories, of enterprises that take out loans in excess of Rs 50 crore.