Congress seeks govt explanation on ‘mounting bank frauds’

The Congress asked the government to explain the mounting trend of bank frauds from 2014-15 to 20120-21 as shown in the annual reports of the Reserve Bank of India (RBI) and alleged that this unchecked fraud would only make “the nation’s journey from the promised $5 trillion economy to a Rs 5 trillion bank fraud”.

These bank frauds, the All India Congress Committee (AICC) said, showed how “the Modi government has weakened the banking system by allowing the fraudsters to either continue functioning in the country or leave the country without making any efforts to recover the fraud amounts”.

Referring to the RBI’s annual report for 2020-21 detailing the data around cases of bank frauds, AICC spokesman Gaurav Vallabh said on Monday: “The cases and amount of bank fraud has been on a rapid rise since 2014-15.

With 2020-21 alone showing a total amount of fraud at Rs 1.38 lakh crore.” He said while the RBI and official agencies tried to argue that bank fraud numbers for 2020-21 declined from the previous year, “another side to the story shows that total bank fraud amount has been increasing since 2014-15, and increased at a CAGR of 57% between 2014-15 and 2019-20”.

Vallabh pointed out that the Rs 1.38 lakh crore fraud took place in 2020-21 despite a loan moratorium which was in effect till August 31, 2020, and restructuring initiatives were in effect until December 31, 2020. “Even if we focus on the last three years, the average fraud amount increased from Rs 10.5 crore in 2018-19 to Rs 21.3 crore in 2019-20 to Rs 18.8 crore in 2020-21.

The average fraud amount was Rs 4.2 crore in 2014-15. Hence, the average fraud amount has become 4x to 5x under Modi 1.0 and Modi 2.0,” he said. The RBI data showing a longer average time lag between the date of occurrence of frauds and the date of detection added to the worrisome trend, he said.

Vallabh asked the Centre: “Why has the government failed to curb bank frauds in the last seven years? What is the government doing to recover the amount involved in these bank frauds? And, how much amount has been collected from these fraudsters who are weakening our banking system?”

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