Bank fraud up 77%, increase in housing loan frauds: RBI

November 16, 2006	(1 votes, average: 2 out of 5)  Loading ...
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There’s bad news for Indian banks. According to a Reserve Bank of India report, banking frauds are up 77 % from the previous year and have crossed over Rs 1000 crore, reports CNBC-TV18.

They are not only increasing in number but also getting larger by the day. Banking frauds are making their presence felt.

RBI’s trend and progress report of 2005-06, states that the amount involved in banking frauds has increased to Rs 1,381 crore up from Rs 779 crore last year- an astounding rise of 77%. The number of cases reported have also risen by 33 % to almost 14,000 from just 10,500 last year.

The report attributes the sharp rise in frauds to an increase in housing loan frauds. The report says that the submission of fake documents to procure housing loans is a rampant practice in the sector.

The RBI has requested the state governments to help put a system in place which can detect whether the same property has been mortgaged more than once, but very few states have expressed their enthusiasm to help put such a systme in place.

Bill finance and cheque discounting were two other areas that were zeroed in the report by the RBI. Drawing of benami or false bills and clandestine removal of stocks is also a common modus operandi adopted by borrowers. Laxity in checking documents and visting the mortgaged property before sanctioning a loan have contributed to a rise in frauds, suggests the report.

Source:  www.moneycontrol.com

News Published Under:   Banking and Finance |

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