An analysis of data compiled by the Reserve Bank of India has revealed that on an average, at least one banker is caught and punished for involvement in fraud every four hours.
According to the data, as many as 5,200 officials of public sector banks have been punished for fraud between January 1, 2015 and March 31, 2017. At Punjab National Bank (PNB), 184 officials were caught for fraudulent activities during the same period, reported The Times of India.
The data comes when the Central Bureau of Investigation (CBI) have arrested officials of the PNB in the Rs11,400 crore bank fraud. On Saturday, the CBI arrested three more people, who have been remanded to police custody for 14 days till March 3. More than 20 officials of the bank have been arrested so in the last four days.
When it comes to fraud, the State Bank of India is on the top of the chart, with 1,538 arrests, while the Indian Overseas Bank and the Central Bank of India are on the second and third place with 449 and 406 insiders, respectively, being found guilty.
"These employees have been convicted, awarded penalties, including dismissal from service," the RBI document states. The central bank is in the process of compiling the data for such cases from April 2017, the newspaper added.
The data, however, does not reveal the financial loss banks suffered due to employees committing fraud. But a separate data accessed from the RBI for the period between April 1, 2013 and December 31, 2016 shows that all commercial banks, including private ones, lost Rs 66,066 crore to 17,504 frauds, the report added.
The PNB fraud pertains to issuance of fake Letters of Undertaking(LoUs) to companies associated with billionaire jeweller Nirav Modi by errant PNB employees, which enabled these companies to raise buyers credit from international branches of other Indian lenders.
Last week, the PNB had lodged an FIR with CBI stating that fraudulent LoUs worth Rs280.7 crore were first issued on January 16.
At the time, the PNB had said it was digging into records to examine the magnitude of the fraud. In the complaint, the PNB had named three diamond firms—Diamonds R Us, Solar Exports and Stellar Diamonds—saying they had approached it on January 16 with a request for buyers credit for making payment to overseas suppliers.
The bank sought 100% cash margins for issuing LoUs for raising buyers credit, which was contested by the firms saying they had availed of the facility from as early as 2010. Modi, his wife Ami, brother Nishal and uncle Mehul Choksi are partners in Diamonds R US, Solar Exports and Stellar Diamonds, which has shops in foreign locations such as Hong Kong, Dubai, and New York.
(With PTI inputs)
