New Delhi: State-run banks have reported 8,670 "loan fraud" cases totalling Rs. 612.6 billion ($9.58 billion) over the last five financial years up to March 31, 2017, the Reserve Bank of India (RBI) data showed according to the information obtained through a RTI request.
"The figures expose the magnitude of the problem in a banking sector already under pressure after years of poor lending practices. Bad loans surged to a record peak of nearly $149 billion last year", Reuters reported on Friday.
"Bank loan frauds have steadily increased as well, reaching Rs. 176.34 billion in the latest financial year from Rs. 63.57 billion in 2012-13", the RBI data obtained by Reuters reporter showed.
The above figure doesn't include the Punjab National Bank (PNB) case.
The Punjab National Bank (PNB) on Wednesday said it had detected a fraud totaling Rs.11,400 crore. The bank suspected Nirav Modi and his associates behind the scam. Nirav Modi was earlier booked on February 05 in a similar case.
"The Bank has detected some fraudulent and unauthorised transactions in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance," India's second-biggest state-run bank said in a regulatory filing on Wednesady.
"Based on these transactions other banks appear to have advanced money to these customers abroad", it added.
While PNB did not name the other lenders, Union Bank of India, Allahabad Bank and Axis Bank are said to have offered credit based on letters of undertaking (LOUs) issued by PNB.
An LOU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.
The Enforcement Directorate (ED) on Thursday raided many premises in Surat, Mumbai and some other places and siezed properties worth more than Rs.5000 crore.
Nirav Modi made to the Forbes' list of billionaires in 2013 and has remained in the exclusive group ever since. In the Forbes' list of billionaires for 2016, Nirav Modi was ranked 1,067 in the world and 46 in India. He was ranked 1,054 globally and 82 in India a year ago. Nirav Modi was born in a family of diamond merchants.
The Forbes had described Nirav Modi as one of the youngest billionaires of India. He is the founder of USD 2.3 billion Firestar Diamond and has business spread across three continents from China in Asia to Hawaii Islands in North America.
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