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The banking sector has witnessed a decline in fraud cases of over a sum of 100 crore in 2021-22. According to official data, the number of fraud cases in private as well as public sector banks dropped to 118 in FY22 from 265 in 2020-21.

In the case of public sector banks (PSBs), the total number of fraud cases of over 100 crore declined to 80 from 167 in Financial Year 2021. For private-sector lenders, such cases were reduced to 38 in Financial Year 2021-22 from 98 earlier.

In terms of cumulative amount, it has come down to 28,000 crore from 65,900 crore in FY'21 for Public Sector Banks.

For private sector banks, the reduction is from 39,900 crore to 13,000 crore in FY'22.

In a bid to check frauds, the RBI has been taking several steps including improving the efficacy of the Early Warning System (EWS) framework, strengthening fraud governance and response system, augmenting data analysis for monitoring of transactions, and introduction of dedicated Market Intelligence (MI) Unit for frauds.

During 2021-22, the Reserve Bank of India carried out a study on the implementation of the EWS framework in select Scheduled Commercial Banks, in collaboration with the Reserve Bank Information Technology Private Limited (ReBIT).

Further, the effectiveness of EWS was assessed in select banks by using Machine Learning (ML) algorithms.

Earlier this year, the State Bank of India (SBI) reported one of the biggest bank frauds in the country totalling 22,842 crore, perpetrated by ABG Shipyard and its promoters.

This was much higher than the case involving Nirav Modi and his uncle Mehul Choksi, who allegedly cheated Punjab National Bank (PNB) of around 14,000 crore through the issuance of fraudulent Letters of Undertaking (LoUs).

Last month, the Central Bureau of Investigation (CBI) booked Dewan Housing Finance Ltd (DHFL), its former CMD Kapil Wadhawan, director Dheeraj Wadhawan and others in a fresh case involving 34,615 crore, making it the biggest bank fraud probed by the agency.

A consortium of lenders led by Union Bank of India has alleged that the company had availed credit facility to the tune of 42,871 crore between 2010 and 2018 from the consortium under various arrangements but started defaulting on repayments from May 2019 onwards.

The accounts were declared non-performing assets at different points in time by banks.

(With PTI inputs)

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