Frauds in public sector banks dip 51% to Rs 40,295 crore; Cases not falling fast enough, says RBI

Public sector banks reported over 51 per cent dip in the amount involved in frauds to Rs 40,295.25 crore during the financial year ended March 2022, the Reserve Bank of India has said.

The 12 PSBs (Public Sector Banks) had reported frauds worth Rs 81,921.54 crore in preceding fiscal 2020-21, the Reserve Bank has said in response to an application under the Right to Information (RTI) Act.

However, the number of fraud cases didn’t fall at the same pace as a total of 7,940 frauds reported by the PSBs in 2021-22, against 9,933 incidents reported in FY21, said the RBI’s reply to Madhya Pradesh-based RTI activist Chandrashekhar Gaur.

According to the RBI data on frauds reported by PSBs in all categories during FY22, the highest amount of Rs 9,528.95 crore was reported by the city-based Punjab National Bank (PNB), involving 431 such incidents.

The country’s largest lender State Bank of India reported frauds worth Rs 6,932.37 crore in as many as 4,192 cases — reflecting incidents of a large number of small value frauds.

Bank of India reported frauds worth Rs 5,923.99 crore (209 incidents), followed by Bank of Baroda at Rs 3,989.36 crore (280); Union Bank of India Rs 3,939 crore (627), while Canara Bank reported frauds worth Rs 3,230.18 crore in just 90 cases — showing that the transactions were of high value frauds.

Among others, Indian Bank customers faced frauds amounting to Rs 2,038.28 crore in 211 cases; Indian Overseas Bank Rs 1,733.80 crore (312); Bank of Maharashtra Rs 1,139.36 crore (72 cases); Central Bank of India Rs 773.37 crore; UCO Bank Rs 611.54 crore (114 crore) and Punjab & Sind Bank reported frauds of Rs 455.04 crore in as many as 159 incidents.

RBI said that the data may change subject to rectification/update made subsequent to first reporting of banks (in respect of individual frauds). As per the RBI reply, the amount of frauds worth less than Rs 1 lakh has been recorded from April 1, 2017.

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Upbeat on growth prospects, Lulu Financial Holdings to expand NBFC business in India

Bullish on growth prospects, Abu-Dhabi headquartered Lulu Financial Holdings is expanding its NBFC business in India by initially focusing on organic growth and is targeting to have a loan book size of Rs 100 crore by the end of March next year, according to a top company official.

Lulu Financial Holdings, which is mainly into financial services, has investments in the Indian sub-continent, GCC (Gulf Cooperation Council) and APAC (Asia Pacific) regions.

In India, the company owns the NBFC — Lulu Financial Services (India) Private Ltd — and Lulu Forex Private Ltd, India.
The NBFC (Non-Banking Financial Company) started operations last year and is in the process of expanding its business starting from the South, Lulu Financial Holdings Managing Director Adeeb Ahamed said.

“We have got into the NBFC space and it is very big in India…. It is a growth sector and we are targeting that as an area that we will be investing more… We have started expanding in Kerala and we will be taking it to other states as well,” he told PTI in a recent interview. Currently, the NBFC business is focusing on the SME (Small and Medium Enterprises) sector. “We are hoping to have a book size of Rs 100 crore by March 2023. It is the lending side,” Ahamed said

In a report released in March, rating agency Icra Ratings said the asset under management of NBFCs (retail) in India is expected to grow by 5-7 per cent in fiscal 2022 and by 8-10 per cent in fiscal 2023. According to Ahamed, initially, the company will look at organic growth for the NBFC vertical as it will provide an opportunity to be more grounded and hear out the consumers more closely.

“If it is inorganic, then it will be taking too much on the plate at this point of time. With such volatility in the market, we would rather like to grow organically. First two years of expansion will be fully organic,” he said.

About the regulatory framework in India, Ahamed said the country is a strong and growing market, and there have been a lot of changes.

“India is a very strong market but it is a growing market. One should not see it in comparison to other matured markets and start making strategies that have worked in other markets. We would always want to see India as a market of its own, which has its own character… a lot of things have changed in the last few decades,” he pointed out.

Emphasising that his group is not here for a valuation purpose but for the long-term, Ahamed said it had set up the forex division in 2012 and at that time, it did not have the interest to go to any other space.

“Today, a lot of regulations have been eased and it is more comfortable for international people like us to come. It encourages us to come and start deploying our own funds in the market,” he said. Lulu Financial Holdings has a presence in the hospitality space also but the core focus is the financial sector.

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