International Journal of Trend in Scientific Research and Development (IJTSRD) Volume 4 Issue 3, April 2020 Available Online: www.ijtsrd.com e-ISSN: 2456 – 6470 @ IJTSRD | Unique Paper ID – IJTSRD30238 | Volume – 4 | Issue – 3 | March-April 2020 Page 70 Analysis of Frauds in Indian Banking Sector Mrs Sunindita Pan Lecturer in Economics, Loyola Academy, Alwal, Telangana, India ABSTRACT Indian economy is one of the world’s fastest growing economies with special growth of banking sector in the past few decades. Banking sector is the backbone of any economy. The Indian banking sector has experienced considerable growth since the introduction of financial sector reforms and liberalisation of economy in 1991. Though the banking industry is well regulated by Reserve Bank of India, still the sector suffers from financial distress. This study endeavours to cover banking frauds. In this article, author analyses the current financial difficulties in the banking sector due to the scams and frauds. The report discusses about the case of mounting Non- performing assets in past few years across Indian scheduled public sector banks. Majority of the banks in India are facing the problems of low lending rate and nonperforming assets. Scams and non-payment of the loans by the influential and wilful defaulters are one of the major problems for the banks at present. The author suggests certain measures to reduce banking sector frauds. KEYWORDS: Non-performing assets, banking frauds, public sector banks How to cite this paper: Mrs Sunindita Pan "Analysis of Frauds in Indian Banking Sector" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456- 6470, Volume-4 | Issue-3, April 2020, pp.70-73, URL: www.ijtsrd.com/papers/ijtsrd30238.pdf Copyright © 2020 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by /4.0) 1. INTRODUCTION In past few years Indian banking sector is confronted with banking frauds. For a better system, banking sector needs to be prompt in reporting and action. Banking sector frauds is one of the key concerns for the regulator, government and banking industry. Banking business involves risk but with rising frauds, banks must have effective control mechanism. Banks are making huge investments over a period of time on Fraud Risk Management frameworks, systems and controls. RBI defines fraud as “A deliberate act of omission or commission by any person carried out in the course of a banking transaction or in the books of accounts maintained manually or under computer system in banks, resulting into wrongful gain to any person for a temporary period or otherwise, with or without any monetary loss to the banks.” In India, there is rising trend of nonperforming assets among the public sector banks which has adverse effect on their profitability. It is believed that there is relationship between banking frauds and non- performing assets. Almost all bank frauds have been concentrated in public sector banks. In past five years of 2014-2018, the amount of frauds in scheduled commercial banks was nearly Rs 83,000 crore with cases nearly 19,500. 2. Objective: The aim of this study is to understand and analyse the underlying causes behind increasing trends in frauds in Indian banking sector. The author also suggests appropriate and suitable measures to address the issue. 3. Research Methodology: To achieve the objective of the study author relies on past data available with the RBI. The present study is based only on secondary data from RBI website, government reports, academic journals and newspapers. Limitation of the study The study is for limited period of Indian public sector banks of 2017-18 to 2018-19. Author focus is on study of banking scams and frauds. 4. Data analysis Table1- amount of banking frauds during 2017-2018 to 2018-2019(Bank group-wise) Bank group No. Of frauds 2017-18 Amount involved (million) 2017-18 Number of frauds 2018-19 Amount involved (million) 2018-19 Public sector banks 2,885 3,82,608.7 3,766 645,094.3 Pvt sector banks 1,975 24,782.5 2,090 55,151.4 IJTSRD30238