Govt takes stringent measures to curb bank frauds

Rajamahendravaram: The Ministry of Finance has implemented strict measures to prevent banking frauds and defaults in public sector banks, as outlined by Finance Minister Nirmala Sitharaman in response to a question from Rajamahendravaram MP Dr Daggubati Purandeswari in the Lok Sabha on Monday.

Sitharaman highlighted the significant decline in reported fraud cases, with financial losses reducing from RS 33,757 crore in 2019-20 to RS 4,224 crore in 2023-24, and further dropping to RS 837 crore by December 2024.

To expedite investigations, banks are now required to report fraud cases immediately to law enforcement agencies, such as the Central Bureau of Investigation (CBI) and State Police. However, the Reserve Bank of India (RBI) has clarified that it does not maintain data on the average investigation time for fraud cases. The government has implemented a series of key measures to prevent bank fraud, including the Central Fraud Registry, which serves as a centralised database for fraud identification, and the Early Warning System (EWS), which uses over 80 triggers to detect financial distress early.

The Fugitive Economic Offenders Act has been enacted to prevent financial offenders from evading legal action, while promoters and directors of companies seeking loans over RS 50 crore are now required to submit their passport copies. Cyber fraud prevention has also been a priority, with the Indian Cyber Crime Coordination Centre (I4C) recovering RS 3,919 crore from 11.20 lakh complaints as of January 2025. Despite these efforts, the government has confirmed there is no current proposal to create a separate investigation unit for bank frauds, as the CBI’s Banking Security and Fraud Branch (BSFB) and State Economic Offense Wings are handling investigations effectively.