Showing posts with label g. Show all posts
Showing posts with label g. Show all posts

Sunday, June 21, 2020

(Q1) of FY 2019-2020, banks in India lost Rs.32 billion. This amount was lost in a short span of three months- f


Business Sector
The business sector is worst hit when a scam or fraud hit bank suspends or stops operations. Companies that hold accounts in the scam-hit bank are affected since they might be unable to operate their accounts for regular transactions.

Hence, they’re unable to pay suppliers or receive money from customers unless they have secondary Current Account at some other bank.

As a result, a business might find itself unable to pay salaries or even rent for their offices or other facilities.

If we look at the broad picture, a bank scam or fraud affects the entire Indian society directly or indirectly.

How? Continue reading. I’ll show you with facts and figures how bank scams affect us.

Scams & Frauds Affecting Banks in India
If you think that frauds and scams are rare in India and happen occasionally, think again. Here’s why.

As many as 53,334 frauds hit banks in India from Financial Year (FY) 2009-2010 to FY 2018-2019, says the regulator, Reserve Bank of India. Banks in India lost whopping Rs.2.05 trillion due to these frauds and scams.

Major Public Sector Undertaking or nationalized banks, private and cooperative banks as well as the new generation Small Finance Banks were affected by scams and frauds, the RBI report adds.

During the first quarter (Q1) of FY 2019-2020, banks in India lost Rs.32 billion. This amount was lost in a short span of three months- from April 1, 2019 to June 30,2019, according to Reserve Bank of India figures.

By Q2 of fiscal year 2019-2020, the amount stood at staggering Rs.72.5 billion. About 90 percent frauds were at nationalized banks- which is something shocking.

Reasons for Bank Frauds
While every bank implements stringent rules and regulations prescribed by RBI, scammers and fraudsters often find a ways and means to overcome these.

Unfortunately, some scams and frauds also involve bank employees at various levels.

Given this scenario, you’ll definitely wonder: how safe is your money with banks in India. In this article, I will try and answer this important question.

There are countless reasons for bank frauds. These include lax vigilance of internal systems, frauds in Know Your Customer (KYC) documents by customers and lots more.

How Safe is Your Money at Banks in India?
Under existing laws of India, all commercial banks operating in this country- including foreign banks- have to get a license from the Reserve Bank of India and other relevant departments of the Indian government.