Bank Frauds Reported In India: A Case Study

Abstract

Since the country's independence, the banking industry in India has undergone significant changes. Despite the fact that it is governed by laws like as the Banking Regulation Act, the RBI Act and the Insolvency Act, the sector nonetheless confronts several problems as a result of different frauds and unethical practises by bank clients and workers. The present study is founded on the sensible concern that, despite several rules, industry is suffering significant losses as a result of unethical behaviour by individuals when public funds are involved. Customer funds are misappropriated by taking advantage of various weaknesses and gaps in our financial system. It is an attempt to shed light on the numerous banking fraud cases and related issues that contribute to the accumulation of NPAs. According to RBI report, both the number (by 28%) and volume (by 159%) of bank frauds increased significantly in 2019-20 Banking fraud is exacerbated by bad financial governance, technical laggardism, insufficient monitoring, unethical behaviour, and political intervention. The post-liberalization period has undoubtedly fresh hues of growth to the banking sector along with the introduction of new challenges. The rise in fraud and nonperforming assets is one of them (NPAs). As a result, essential steps should be taken ahead of time to avoid future financial crises and scams.