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Spike in bank frauds: Lag in reporting or weak internal controls?

Bank fraud numbers may not be as bad as they are made out to be, but their detection and reporting need to improve, writes Raghu Mohan

Bank frauds, banks
Illustration: Ajay Mohanty

Are internal controls in banks so weak as to lead to a doubling in frauds (of Rs 100,000 and above) by value to Rs 1.85 trillion in FY20, with an uptick in the number of cases by 28 per cent, compared to FY19? The Reserve Bank of India’s (RBI’s) latest Annual Report indicates that the sum locked up in frauds is nearly equal to the recapitalisation amount injected into state-run banks during the financial year gone by.   This is surprising, as the Report on the Trend and Progress of Banking (2016-17) had said the process of migration to a web-based reporting ...