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Indian Banks Faces About Rs 70,000 Crore Loss due to Frauds

As informed to the Rajya Sabha today, the Indian banks have faces a total of about Rs. 70,000 Crore during the last three fiscals up to march 2018 due to frauds. In the year 2015-16, the scheduled commercial banks (SCB)s faced a loss of Rs.16,409 crores, in 2016-17 Rs.16,652 and in 2017-18 Rs. 36,694. The same is being stated by the Minister of State for Finance Shiv Pratap Shukla in a written reply to the Rajya Sabha.

The minister have also made it clear that the amount of losses mentioned here is as per the year of reporting and not the year of occurrence of fraud or sanction of loan. This also means that the loans might have been given to the frauds in some earlier years which has got to be reported only later.

The written reply from the minister also states that the gross advances by SCBs increased from Rs. 25.03 lakh crore on March 31st, 2008 to Rs. 68.75 lakh crore on March 31st, 2014.  Stating the reason behind such a huge loss, Shukla said that wilful default, economic slowdown, corruption and loan frauds etc.

As an effort to rescue the money from the borrowers, RBI issued directions to the banks instructing them to file and send applications to the borrowers  under the Indian Penal Code (IPC) of Insolvency and Bankruptcy in respect of the 12 borrowers.

Shukla said, “It subsequently issued further directions to banks advising them to finalise and implement resolution plans in respect of 29 accounts by December 13, 2017, failing which these too had to be referred to CIRP under IBC.”

He further added that 139 borrowers with aggregate gross NPAs of more than Rs 1,000 crore were there. There were a cumulative fund-based and non-fund based outstanding amount of Rs 1,97,769 crore of the 12 borrowers as on March 31, 2017.

As RBI plays an important role in the Development Strategy of the Government of India, it is responsible to take care of its member banks along with also making sure that it answers all the questions raised at its banks.