3 days ago
India bank frauds triple to 360 billion rupees as credit scams swell
[MUMBAI] Bank frauds in India jumped threefold last year, with loans contributing to bulk of the cases, while discrepancies in digital payments declined.
The amount of frauds climbed to 360 billion rupees (S$5.4 billion) at the end of March this year, compared with 122.3 billion rupees a year ago, according to the Reserve Bank of India's latest annual report, which looked at cases above 100,000 rupees.
The jump was exacerbated by an addition of 122 cases amounting to a fraud of 186.74 billion rupees. These cases were removed from classification as fraud in previous years, but added back in the latest year after a court ruling.
The rise in cases underscores the challenges being faced by the banking regulator in the world's fastest growing major economy even as credit growth slows. This comes in the wake of a suspected fraud reported by IndusInd Bank earlier this month, which led to an upheaval at the lender, including top-level exits to rating cuts.
Frauds in private banks rose 270 per cent, while their state-owned peers, which accounted for bulk of the discrepancies, showed a 177 per cent growth in such cases.
Digital payment frauds fell to 5.2 billion rupees last fiscal year from 14.6 billion rupees in the previous year even as transactions through mobile applications and cards gain popularity. The central bank said it is planning a Digital Payments Intelligence Platform to curb payment related frauds.
Transactions using Unified Payments Interface – that allows users to transfer money instantly using their mobile phones – rose 30 per cent from a year ago to 260 trillion rupees. BLOOMBERG
