3 min read.Updated: 19 Oct 2018, 05:57 AM ISTLivemint
Some of the recent frauds shows that Indian banks need significant improvements in operation and governance standards
Fraud is a real operational risk for banks. As the latest Financial Stability Report of the Reserve Bank of India (RBI) shows, the Indian banking system reported about 6,500 instances of fraud involving over ₹ 30,000 crore in the last fiscal. Banking frauds attracted national attention when the Punjab National Bank reported earlier this year that it had been defrauded by companies related to jeweller Nirav Modi and Mehul Choksi. The state-run lender took a hit of about ₹ 12,000 crore. Several other cases of large banking frauds were reported subsequently, which raised questions about the ability of banks, especially in the public sector, to contain them. It is in this context that the analysis of the top 100 banking frauds by the Central Vigilance Commission (CVC), released this week, is important.