One Scam After The Other, Here's How India Has Reportedly Lost 71,500 Crore In Bank Frauds

While India is dreaming of becoming 5 trillion dollars economy in the next five years, a slew of financial scams may hamper the process. Thousands of crores are being lost in the fraud every year and there seems to be no effective mechanism to stop it. By the time frauds are reported in the media, the accused leave the country and the authorities are left with no choice but to wait for them to return.

A bank fraud worth Rs 3,805.15 crore by Bhushan Power & Steel Ltd has been reported by Punjab National Bank to Reserve Bank of India and it¡¯s just a year after the major bank fraud worth Rs 13, 700 crore involving the diamantaire Nirav Modi.

The reports of bank frauds are coming one after another and according to an RBI report, more than 6800 cases of bank frauds which involved an amount of Rs 71,500 crore have been reported in 2018-19, agency PTI reported it in June this year.

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According to reports, the banks reported frauds of an amount of Rs 41,167.03 crore in a total of 5, 916 such cases in 2017-18.

The RBI replied to an RTI query filed by PTI journalist in which the RBI said that an amount of Rs 71, 542.93 crore in the last fiscal which accounts for 73 percent increase in the fraud amount in a total of 6,801 cases of fraud.

A total of 53, 334 cases of frauds have been reported in last 11 fiscal years which involve a massive amount of Rs 2.05 lakh crore, the RBI data said.

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As many as 4, 372 cases which involved Rs 1,860.09 crore were reported in 2008-09 whereas Rs 1,998.94 crore worth fraud were reported in 4, 669 cases in 2009-10. In 2010-11, as many as 4,534 were reported involving an amount of Rs 3,815.76 crore whereas an amount of Rs 4,501.15 crore was involved in a total of 4,093 such cases in 2011-12.

Here are five major bank frauds in recent time:

1. Vijay Mallya, Rs 9,000 crore

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Various public sector banks are trying to get back an amount of Rs 9,000 crore given to liquor baron Vijay Mallya, who allegedly did a fraud and then left the country. He has been living in UK for more than a year now and Indian authorities have been trying for his extradition.

2. Nirav Modi, Rs 11, 300 crore

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In 2018, a fraud was reported in which diamond merchant Nirav Modi and his uncle Mehul Choksi allegedly siphoned off Rs 11,300 crore from PNB. Both the accused later left the country. While Nirav Modi was recently arrested in England and Mehul Choksi is said to be living in the Caribbean. Later, he also surrendered Indian Passport and became the citizen of Antigua and Barbuda.

3. Sterling Biotech Ltd. fraud, Rs 5,383 crore

The Sterling Biotech Ltd (SBL)/ Sandesara Group, a Vadodara based pharma company and its main promoters Nitin Sandesara, Chetan Sandesara and Deepti Sandesara allegedly cheated Indian banks. In October 2017, the Enforcement Directorate (ED) had registered a case against SBL and its promoters for cheating the bank of Rs 5,383 crores. But the investigation done by ED said that the amount lost by banks goes up to Rs 14,500 crore as Sandesara group¡¯s overseas companies had also taken loan of around Rs 9,000 crore from foreign branches of the Indian banks. Business Today had reported.

4. Rotomac case, Rs 3,700 crore

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Kanpur based company Rotomac allegedly found wanting the case of Rs 3,700 crore fraud. The ED and the CBI had been reportedly probing directors of Rotomac group for misusing the credit sanctioned by Bank of Baroda. The investigation agency filed case against the director of the group, Rahul Kothari and Vikram Kothari. International Business Times reported.

5. Bhushan Power & Steel Ltd. Rs 3,805.15 crore

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A couple of days back, PNB reported another fraud of Rs 3,805.15 crore by Bhushan Power & Steel Ltd. The fraud has been done at both domestic as well as foreign exposures of the bank as the fraud includes Rs 3,191.51 crore which was allegedly occurred at Chandigarh branch of the PNB and whereas the Dubai branch reported fraud of Rs 345.74 crore and a fraud of an amount of Rs 267.9 crore allegedly occurred at bank¡¯s Hong Kong branch. Business Today reported.

While the people are still waiting for the overseas black money to return to the country, our own domestic frauds are coming to the fore one after the other.

Will the government do something to recover all the lost money?