Analyzing the fraud tendency in the Indian Banking sector

Abstract

At present, the Indian banking sector is having of worldwide importance for a few years due to its robust regulatory measures and least bank failures during recession and other difficult situations. Banking plays a prominent role in providing required monetary resources for every sector to meet their objectives. At the same time, the banking sector has been facing major challenges like increasing fraudulent cases as Indian banks lost Rs.5.22 lakh crores public money by a way of fraud reporting during the last twelve years, which dents our country’s economy badly. The current study is to analyze the fraud trend and nature wise frauds in Indian public and private sector banks during the period 2012-2023 and further, the current research aims to study the measures taken by Reserve Bank of India and individual banks to curtail the frauds during the said period. Primary data was obtained from bank employees and secondary data from authenticated sources was taken for this study. Our finding revealed that several bank frauds do not differ significantly between the public and private sector banks in terms of amount under cheating & forgery and fraudulent encashment nature. Further, it was observed that fraud amount reporting by public sector banks and private sector banks has been decreasing in trend since 2020 due to the preventive steps initiated by RBI and individual banks.