Hyderabad:Banks are the custodians of public money enjoying public trust. However, increasing instances of loan default is shaking that confidence. Efforts to bring them back remain unfruitful.
Notwithstanding the experience gained, banks continue to issue loans to companies and individuals with a known history of default.
Bank frauds shake public trust The latest data about bank loan default is truly shocking. The authorities have revealed that in the past five years more than 23,000 instances of bank frauds were reported.
Official data has also revealed that more than 53,000 cases of bank frauds were reported in the past 11 years.
However last year saw a peak in bank defaults and frauds. Official statistics state that banks suffered a loss of Rs 71,500 crore.
A record 6800 cases were booked in this connection. This amount is way higher than the loss of Rs 41,000 crore suffered by banks in the previous year. The number of cases booked in that year was 5961.
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Earlier, the RBI had officially stated that there are several loopholes in banking activities. A high number of bank frauds taking place with the support of banking staff are high in Tamilnadu, Andhra Pradesh, Karnataka and Maharashtra.
Investigating agencies have expressed dismay over the huge loans sanctioned to persons having a track record of wilful default. But corporate bodies are getting huge loans without undergoing much of this due process.
In Chennai, two bank staffers colluded to cheat 170 farmers of Rs 60 crore. A similar incident has taken place in Madhya Pradesh capital Bhopal also.
While the fraudsters enjoy much credit, Indian farmers are not considered creditworthy. Auditors do look into the monthly reports of banks. Yet the losses are piling up.
In most cases of frauds, it has been found that bank staff are falling easy prey to inducements. Central vigilance authorities have stated that bank officials that remained posted at one place are developing vested interests and are thus acting against the bank’s interests.
Lack of exemplary and deterrent action against violators of norms is a major factor contributing to the unabated bank frauds.
