It is to noted Prime Minister Narendra Modi introduced a tough bankruptcy and insolvency law in 2016, and fugitive economic offenders law aiming to help banks recover losses from fraud amounting to near $140 billion.
India’s state-run banks reported fraud worth 958 billion rupees ($13.3 billion) from April to end-September of this year, the country’s finance minister said on Tuesday, as the government struggles to help banks recoup losses.
State banks reported 5,743 cases of fraud in the period, most of which had taken place over the last several years, although 1,000 cases worth 25 billion rupees had just taken place, Nirmala Sitharaman told the upper house of parliament.
“Government has taken comprehensive measures to curb the incidence of fraud in banks,” the minister said.
Measures included the freezing of 338,000 bank accounts of inoperative companies in the last two financial years and the enactment of a law with a provision to confiscate the property of those found to have committed fraud and who have fled the country.
State Bank of India reported fraud of 254 billion rupees followed by Punjab National Bank of 108 billion rupees and Bank of Baroda of 83 billion rupees, she said.
Bankers have blamed lax regulations and said some bank officials were working in league with fraudsters.
Punjab National Bank, India’s second-biggest state-run bank, reported more than $2 billion losses through fraud last year alleging that a few rogue employees had issued fake bank guarantees over several years to help jewellery groups raise funds in foreign credit.
BJP party led Modi government move to sell profit making Public sector entities and merging of Profit making public banks with debt ridden banks evoke strong protests from banks employees association
($1 = 71.7050 Indian rupees as at 20-11-2019 )