A report released by the Government released reveals that the frauds involving amounts of over Rs. 1 lac has reduced considerably during the year 2018-19. The report was given by the FM in a written statement to the Rajya Sabha.
- During 2018-19 as many as 6,735 incidence of fraud occurred with a financial implication of Rs. 2,836 crores as compared to 9,836 such incidents amounting to 4,228 an year ago.
- The reason for such frauds was said to be lack of discipline in the Financial system and negligence in the credit culture.
- Previous it was observed that the laxity in the financial system was found across the stakeholders.
- Several instances made the borrowers to walk away freely to believe that they could carry out with default, wilful default or even fraud. Few of such loopholes which made them to walk free were:
- Shell Companies layered operations to swindle funds
- Control of assets and continued access to funds despite being a default or being an escapee to foreign countries.
- Non availability of passport details and powers not being vested with banks, to issue look out circulars
- Lack of assured checking for wilful defaulters.
- Fraud in high value NPA cases
- Moreso the bankers’ roles were not serious put to test and there was slackness in monitoring the Auditors’ activities.
- Extensive reforms have led to
- Change in credit culture
- Tightened discipline brought out for every stakeholder in the financial system
- Considerable reduction in occurrence of frauds.
No Comments