The rise in frauds in 2017-2018 was mainly on account of the rise in the value of frauds. "Incidentally, large value frauds involving Rs 500 million and above constituted about 80 per cent of all the frauds during the year," said the RBI.
"The quantum jump in the amount involved in frauds during 2017-18 was on account of a large value fraud committed in gems and jewellery sector, mainly affecting one public sector bank (PSB)," said the central bank. This refers to the Nirav Modi-PNB scam.
While 90 per cent of frauds were located in the credit portfolio of banks
previously, frauds related to off-balance sheet operations, foreign exchange transactions, deposit accounts and cyber-activity took the centre stage in 2017-2018, said the report.
Public sector banks
(PSBs) accounted for a majority of frauds during the year. During 2017-18, PSBs accounted for 92.9 per cent of the amount involved in frauds of more than Rs 0.1 million, as reported to the Reserve Bank, while the private sector banks accounted for six per cent. With regard to the cumulative amount involved in frauds till March 31, 2018, PSBs accounted for around 85 per cent, while the private sector banks accounted for a little over 10 per cent, according to the report.