As the total number of bank frauds increased from 6,800 in FY19 to more than 13,500 in FY23, the share of private banks in the occurrence went from 34 per cent to 66 per cent.
The Asset Quality Review of 2015 by the Reserve Bank of India has served its purpose and the 'era of loan write-offs' is over, says State Bank of India Chairman Dinesh Khara.
Since financial year 2015-2016 (FY16), all banks have written off more than Rs 1.01 trillion due to fraud (based on the date of reporting of frauds), or roughly Rs 13,000 crore (Rs 130 billion) annually.
Banks reported about Rs 3,000 crore (Rs 30 billion) in write-offs in FY16, or 0.04 per cent of total credit that year.
In comparison, write-offs due to frauds accounted for 0.03 per cent of total credit in FY23, though the overall figure was still higher than in FY16.
Banks wrote off more than Rs 10 trillion between FY19 and FY23. Fraud write-offs were 9 per cent of this amount.
In FY16, State-owned banks reported 80 per cent of all amounts written off for fraud.
Private banks' share was 12 per cent. The share flipped in FY21 when State-owned banks accounted for 14 per cent of write-offs and private banks 79 per cent.
Private banks in FY23 accounted for 74 per cent of amounts written off due to fraud and state-owned ones comprised 24 per cent.
As the total number of bank frauds increased from 6,800 in FY19 to more than 13,500 in FY23, the share of private banks in the occurrence went from 34 per cent to 66 per cent.
The amount involved in such frauds declined from Rs 71,500 crore (Rs 715 billion) to Rs 30,200 crore (Rs 302 billion) in the same period.
The amount involved in all bank frauds had topped Rs 1 trillion in FY20 and FY21.
However, the share of private banks in the amount involved in frauds increased from 10 per cent in FY19 to 30 per cent in FY23.
Of all bank frauds in FY23, those involving loans comprised 30 per cent.
Out of all the amounts involved in fraud, 95 per cent was in loans.
Feature Presentation: Aslam Hunani/Rediff.com
