PSU Banks reported frauds of over Rs 95,700 crores in six months, Nirmala Sitharaman in Rajya Sabha

Several Government-owned banks reported frauds of over Rs 95,700 crores in the first six months of the current fiscal period, Defence Minister Nirmala Sitharaman stated in Rajya Sabha on Tuesday.

According to the FM, the apex bank Reserve Bank mentioned 5743 frauds in total. These frauds reported by Public Sector Banks occurred during the period from April 1, 2019 to September 30, 2019. The fraud count totalled to an amount of Rs 95.760.49 crores. The finance minister further added that comprehensive measures have been implemented to prohibit the incidence of frauds in banks. One of the measures includes freezing of 3.38 lakh bank accounts of inoperative companies and organizations and enacting a law which provides confiscating the property of people who committed fraud and fled the country.

The State Bank of India reported a fraud count of Rs 254 billion, followed by the Punjab National Bank at 108 billion and the Bank of Baroda at 83 billion. The second biggest state-run bank, Punjab National Bank reported over $2 billion losses through frauds last year. The bank alleged a few rogue employees for the fraud who issued fake bank guarantees over the years led to the frauds.

The Minister of State for Finance Anurag Thakur stated in Rajya Sabha that with an increase in a limit of withdrawal to Rs 50,000 for the customer of Punjab & Maharashtra Co-operative bank, only 78% of depositors of the bank will be able to withdraw their entire account balance.

As of September 23, 2019 when the RBI directions were imposed, the total depositors of the Punjab and Maharastra Bank stood at 9, 15,775. The statutory inspection of the bank conducted by RBI on March 2019 with reference to its position revealed a large group exposure towards the Housing Development & Infrastructure Ltd Group companies standing at a staggering amount of nearly Rs 6,226.01 crores.

Out of this total of Rs 6,226.01 crores as on March 31, 2019 to the HDIL group, only Rs 439,58 crores were disclosed to the RBI and the remaining Rs 5,786.43 crores still remained undisclosed.

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