INCREASING BANKING FRAUDS-A DISCUSSION
Vijay Mallya and Mehul Choksi in 2017 and Nirav Modi in 2019, these are the ones that become highlighted due to heavy media attention and huge amount of NPAs (Non-performing Assets) assigned with them. Vijay Mallya owes Rs. 9000 Crore, Mehul Choksi has a debt of about 500 Crore and Nirav Modi owes 11000 crore to PNB. Increased bank frauds lead to outstanding loans and increased deficit, which than lead to many multiple folds economic calamities, a single discrepancy in the economy leads to many other disasters , such as increased prices of goods, lack of deposits and economic failure in banks. These “Non performing Assets” are a huge trouble to India’s growing economy which is consistent from last 4 years, Indian economy is experiencing huge ups and downs since then, recently too India’s GDP is facing an all time low in the last 10 years, though a small percentage is due to NPAs, but it is the prime reason to ongoing banking ups and downs in the banking sector in India.
In this discussion, we will not discuss the political reasons, political aspects of the situation of NPAs; we will only be reviewing the what, when and how of the banking frauds that is there.
First, let’s discuss some key facts which would help in the GD
- A survey by FIS, a financial services technology provider, showed that 18% of Indians suffered from an online banking fraud. This was a higher percentage than any other country. In comparison, only 8% of people from Germany reported a fraud followed by 6% in the UK.
- There were 5,076 Bank fraud cases involving Rs 23,933 crore in 2016-17. 23,866 Bank fraud cases of Rs 1 Lakh or above in each case, were reported during 2013 to March 1, 2018. An amount of Rs 1, 00,718 crore was involved in all these fraud cases
- The highest amount of gross NPAs is for the country's largest bank, the State Bank of India, at Rs 2,01,560 crore. NPA for PNB stood at Rs 55,200 crore; for IDBI Bank - Rs 44,542 crore; Bank of India- Rs 43,474 crore; Bank of Baroda, Rs 41,649 crore; Union Bank of India, Rs 38,047 crore; Canara Bank, Rs 37,794 crore; ICICI Bank, Rs 33,849 crore.
Effects of NPAs
- There is difference between willful defaulter and the defaulter due to compulsion without much of his mistake. Willful defaulter is a criminal to the society as a whole and should not be spared.
- A loan can be recovered by infusing more capital in case a business decision has gone wrong because that particular firm failed in the market and the loan has become NPA. But in the case of a loan fraud, it is criminal intention as in the Nirav Modi case.
- These perpetrators of Bank Frauds misuse the banking system and disturb financial discipline making banking system vulnerable and insecure for common people dealing with banks
- When farmers don't repay their loans, they commit suicide. If the middle class fails to pay their EMI, their homes and cars get confiscated. But the big defaulters like the corporate groups take huge loans do not repay and banks turn them into NPAs or loss assets. This is the loss of huge public money
- These big defaulters run out of country due to timely action and arrest of them. Although, many people should have been arrested, but not a single person of the corporate group has been arrested giving wrong signals in the society
For such useful informative details and getting help regarding any B-School related query or searching best MBA colleges in cities like Delhi/Mumbai/Bangalore/Pune please must check Edumyra. Also we are here to give all the info on exams like CAT/XAT/SNAP etc.
Source - Edumyra
Comments
Post a Comment