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RBI annual report: Worst over for credit growth but frauds still continue
By IndianMandarins- 29 May 2021
1355New Delhi (29.05.2021): The RBI annual report has expressed its serious concern over the growing frauds in the private sector banks while saying that the worst may be over for non-food credit growth. The report shows that while public-sector banks recorded a non-food credit growth of 3.1% in March 2021 versus 3.4% a year ago, the same in the private-sector banks was up 9.6% versus 13.9%, The report narrates the story of how the credit growth picked up momentum from November 2020 after hitting a three-year low of 5.1% in the first half of FY21 caused by pandemic-triggered lockdowns. However, it is seriously concerned over the increasing cases of frauds in the private sector banks. The report says that, while the total number of fraud cases, both in terms of number and value, declined in FY21, they increased in private banks. Overall, though, the number of frauds in the banking system declined 15% YoY by number and 25% YoY in terms of value during FY21. RBI data shows that the overall decline was facilitated by the PSBs efforts to curtail frauds While private banks reported a rise of 21% in the number of fraud cases year-on-year (YoY) in FY21, public-sector banks (PSBs) have reported a decline of 34% YoY during the same period. In value terms, private banks have reported a rise of 35% YoY in frauds while PSBs have reported a decline of 45% YoY. Data show that 59.2% of the total value of frauds were reported by public sector banks and 33.5% by private-sector banks in FY21 versus FY20's figures of 80% and 18.4% respectively. The report says the average time lag between the date of occurrence of frauds and the date of detection was 23 months in FY21, though, in cases of large frauds of Rs 100 crore and above, the average lag was 57 months. “In terms of area of operations, frauds have been occurring predominantly in the loan portfolio (advances category), both in terms of number and value,” the Bank said. This has prompted the Bank to declare that in FY22, it aims at improving the fraud risk management system including the early warning signal (EWS) framework. It also wants to strengthen fraud governance and response system. This includes augmenting the data analysis for monitoring of transactions, introduction of dedicated market intelligence (MI) unit for frauds, and implementation of automated unique system generated number for each fraud.
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RBI annual report: Worst over for credit growth but frauds still continue
By IndianMandarins - 2021-05-29 13:03:00
New Delhi (29.05.2021): The RBI annual report has expressed its serious concern over the growing frauds in the private sector banks while saying that the worst may be over for non-food credit growth.
The report shows that while public-sector banks recorded a non-food credit growth of 3.1% in March 2021 versus 3.4% a year ago, the same in the private-sector banks was up 9.6% versus 13.9%,
The report narrates the story of how the credit growth picked up momentum from November 2020 after hitting a three-year low of 5.1% in the first half of FY21 caused by pandemic-triggered lockdowns.
However, it is seriously concerned over the increasing cases of frauds in the private sector banks.
The report says that, while the total number of fraud cases, both in terms of number and value, declined in FY21, they increased in private banks. Overall, though, the number of frauds in the banking system declined 15% YoY by number and 25% YoY in terms of value during FY21.
RBI data shows that the overall decline was facilitated by the PSBs efforts to curtail frauds
While private banks reported a rise of 21% in the number of fraud cases year-on-year (YoY) in FY21, public-sector banks (PSBs) have reported a decline of 34% YoY during the same period. In value terms, private banks have reported a rise of 35% YoY in frauds while PSBs have reported a decline of 45% YoY.
Data show that 59.2% of the total value of frauds were reported by public sector banks and 33.5% by private-sector banks in FY21 versus FY20's figures of 80% and 18.4% respectively.
The report says the average time lag between the date of occurrence of frauds and the date of detection was 23 months in FY21, though, in cases of large frauds of Rs 100 crore and above, the average lag was 57 months. “In terms of area of operations, frauds have been occurring predominantly in the loan portfolio (advances category), both in terms of number and value,” the Bank said.
This has prompted the Bank to declare that in FY22, it aims at improving the fraud risk management system including the early warning signal (EWS) framework. It also wants to strengthen fraud governance and response system. This includes augmenting the data analysis for monitoring of transactions, introduction of dedicated market intelligence (MI) unit for frauds, and implementation of automated unique system generated number for each fraud.
