Crores of rupees are disappearing from bank accounts or are being used deceitfully everyday. Recently, a bank branch manager recklessly sanctioned housing loans for the purpose of flats. On spot verification by the Central Bureau of Investigation (CBI), on the behest of the bank's chief vigilance officer, it transpired that the three storeyed building was constructed as a hotel.
Further investigation revealed that the branch manager had sanctioned many other housing loans against fabricated agreements of sale in fictitious names. By the time, the investigation was completed the bank had been duped of Rs 25 cr.
"This is an alarming scenario. Afterall, it is people's hard earned money. Banks the worldover keep a tight vigil as any slip will bring them down and even impact the economy," says Mayur Joshi, chair-man of Indiaforensic Research Foundation, a Pune-based consultancy which conducts fraud examination and forensic accounting in India.
Information collated by the CBI which SundayET is in possession of, bank frauds—the central investigation body tracks frauds valuing only a crore or above—amount doubled in 2008-09 from Rs 659 cr in 2007-08 to Rs 1,404 cr.
The number of such frauds also rose from 177 to 212. "The focus is on expeditious completion of investigation, close follow up of under-trial cases to conclude them without delay," says a CBI spokesperson. The CBI conducts its investigations through differ-ent wings--the Anti-Corruption Bureau, Bank Securities & Fraud Cell and the Economic Offences Wing.
The rising number of frauds has also got the central bank concerned. "It's high time banks strengthen their fraud management practices. In their bid to quickly expand and grow, they are losing focus on risk control," a senior official of the bank, who did not want to be named, says.
Not that the RBI isn't aware of the rising trend. In September last year, it had blamed senior management at banks for their failure to have proper risk management mechanism. It had then advised the banks to form a special committee chaired by their CEOs, who could oversee fraud investigation and make monitoring centralised rather than leaving it to the regional centres.