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Urban Cooperative Banks Report Nearly 1,000 Frauds Worth Over Rs 220 Cr: RBI

The central bank said a total of 181 fraud cases involving Rs 127.7 crore were noticed during 2018-19.

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Urban cooperative banks (UCBs) have reported nearly 1,000 cases of fraud worth more than Rs 220 crore in the last five fiscals, according to the Reserve Bank of India (RBI).

Responding to an RTI query, the central bank said a total of 181 fraud cases involving Rs 127.7 crore were noticed during 2018-19.

A total of 99 and 27 such cases involving Rs 46.9 crore and Rs 9.3 crore were reported during 2017-18 and 2016-16 respectively, it said.

As many as 187 cases of fraud involving Rs 17.3 crore were reported in 2015-16 as against 478 such cases involving Rs 19.8 crore during 2014-15, the RBI said.

During 2014-15 and 2018-19, a total of 972 cases of bank fraud worth Rs 221 crore were reported by the UCBs, it said.

"Cases of frauds reported to RBI are required to be filed by banks as criminal complaints with law enforcement agencies. Banks are required to look into aspects of staff accountability and punish the guilty through internal proceedings," the central bank said.

It declined to share details of action being taken on these fraud cases saying "it is not readily available".

"The information in respect of action being taken or already taken is not available readily for providing to the applicant," the RBI said in reply to the RTI application filed by PTI.

The cases of frauds assume significance as the Punjab and Maharashtra Co-operative (PMC) bank has been under the RBI's restrictions since September 23 after the central bank had found financial irregularities, including huge under-reporting of loans and non-performing assets to real estate developer HDIL to the tune of Rs 6,500 crore, against its entire assets of Rs 8,880 crore, using hundreds of dummy accounts.

A total of 1,544 UCBs across the country have deposits of a whopping Rs 4.84 lakh crore as on March 31, 2019, it said.

Of them, a highest of over Rs 3 lakh crore worth deposits are in 496 UCBs in Maharashtra alone, followed by Rs 55,102 crore in 219 such banks in Gujarat and Rs 41,096 crore in 263 urban cooperative banks in Karnataka, among others, according to the RTI reply.

To ensure that UCBs adhere to norms and depositors' money is safe, RBI has put in place off-site monitoring mechanism which requires the UCBs to submit periodic returns, statements, etc. to the central bank, it said.

"On-site examination of UCBs is also carried out at prescribed periodic intervals through sending inspection teams to the UCBs. Based on the findings of the inspection and off-site returns filed by the UCBs, appropriate supervisory action is taken against the UCBs by RBI," the central bank said.