BENGALURU: The post-demonetisation scrutiny of bank employees may have hogged limelight but bank officials have faced action for involvement in borrowal account frauds for years now.
Data accessed from the Reserve Bank of India (RBI) and the ministry of finance shows that 1,674 bank staff, including 148 from Karnataka have been suspended in connection with such cases between April 1, 2011 to December 31, 2016, at an average of 291 per financial year.
The suspended officials—several of them have returned to work—are from 49 banks, including private and foreign banks like Citibank. The number of fraud cases where bank employees were found to be involved are 856 but the total number of such frauds are more.
While a consolidated number of such cases or the extent of loss for all the said years was not immediately available, RBI data shows that in 2015-16 alone banks incurred a loss of Rs 15,841 crore in as many as 2,256 cases—and officials were involved in a handful of these cases. The data for the present year is being complied.
A concerned RBI has been issuing circulars to banks about how to effectively report such cases and also put in place mechanisms to prevent them in the future. A July 2016 circular, the latest in a series says: “…To compress the time taken in detection of fraud, a framework for handling loan frauds has been put in place.”
The objective of the framework is to direct the focus on banks on the aspects relating to prevention, early detection, prompt reporting and timely initiation of staff accountability. RBI deputy governor SS Mundra said last week that the “Red Flag” mechanism has been introduced to flag off frauds too.
According to the data, the State Bank of India (SBI) has the highest number of cases where bank employees were found to be involved, not surprising given that it has the largest network in the country. The SBI accounts for 149 of the 865 such cases, followed by UCO bank (75 cases) and Indian overseas bank (55 cases).
However, so far as the number of officials suspended goes, UCO Bank leads the pack with 191 of them, followed by UCO Bank (191 officials), United Bank of India (151) and SBI (132).