Indian banks lost around 17k crores in fraud

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Updated on September 24, 2023 4:54 am

Indian banks lost around 17k crores due to fraud in the fiscal year 2016-17. Mind that this amount doesn’t account for the bad debts and debts due to bankruptcy. This astounding and devastating loss occurred due to cyber frauds, thefts, robbery, counterfeiting of currency, etc.

Revealing the details in a written reply in the Lok Sabha, Minister of State for Finance Shiv Pratap Shukla said that the numbers, which are based on RBI data, cover incidents across the range of scheduled commercial banks and a few select financial institutions.
“As per the fraud monitoring reports submitted by the scheduled commercial banks and select financial institutions, the amount lost on account of frauds during 2016-17 was `16,789 crore”, Shukla said. He also added that an interdisciplinary standing committee on cyber frauds has been constituted by the RBI to monitor and check frauds through the internet channel. This standing committee is comprised of representatives from academia, information security audit, forensic and cybersecurity experts. According to Shukla, the committee reviews, inter alia, threats inherent in the existing or emerging technology, and suggests appropriate policy interventions.
Meanwhile, banks have also been the target of other crimes including bank robbery, theft, dacoity and burglary. “1,012 incidents of bank robbery, theft, dacoity and burglary were reported from different parts of the country during 2016-17. The amount involved in such incidents summed up to about 65.3 crore. Further, 393 such cases involving around 18.48 crore have were reported in the first half of the current fiscal,” the Ministry of Finance said.
In order to prevent these incidents and mitigate their effects, Shukla said that the RBI advises banks from time to time to enhance security arrangements at their branches and ATMs. “These include coverage of ATM sites by CCTVs, verification of credentials of private security guards, ensuring adequate training of security staff posted at ATMs, etc. Banks have also been advised to review and strengthen the security arrangements in their branches and ATMs to deal with instances of robbery etc. and for dealing with risk perceptions emerging from such incidents. In addition, RBI has forwarded suggestions for improvement, received from law enforcement authorities in this regard, to banks, for consideration and adoption,” Shukla said.
The incidents of cyber-crime increased by 6.3% in 2016, as per the report released by National Crime Record Bureau (NCRB). Though cyber-crimes against banks is like a sub-set of this data but still the internet has become more vulnerable.
In another reply, Minister of State for Finance P Radhakrishnan said the new fake currency (Rs 2,000 and Rs 500) seized in the recent past are scanned or photocopied notes.
“In most of these cases, the copied notes sport similar serial numbers,” he said.
He said as per available records, the agencies concerned have not reported any high-quality counterfeit in the new Rs 500/2000 denomination banknote as defined in the Unlawful Activities (Prevention) Act.

The nation is losing money. On one side our Prime Minister wants the Nation to switch to cashless and cyber economy and on the other side, the cyber-crimes are increasing. Good governance is not only about making long-shot promises but to execute and implement them. Demonetization has certainly failed to control the counterfeiting of the currency. As per the experts, new currency notes are far less secured than their predecessors. The government should improve its security so that more confidence be built in the people to trust cashless modes of payment.

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