Urban Mirror Correspondent
New Delhi, January 02: The Lok Gathbandhan Party (LGP) today said that banking system has virtually collapsed because of fraudesters looted around Rs 41,167 crore during the last one year (2017-18) in the country. The LGP said as compared to 2016 there is sharp rise of 72% in financial scandals in banking sector which indicated that the situation has assumed serious dimension.
The spokesman of the party said here on Wednesday that while overall frauds in baking system accounted for Rs 23,933 crore in 2016-17 with 5,917 fraud cases, the maximum 2526 cases were advances related and 2059 were cyber frauds. The Lok Gathbandhan Party headed by former Secretary Government of India Vijay Shankar Pandey said that such an enormous loot has given ample indication about total administrative failure and prevailing mismanagement in collusion with bank officers, politicians and bureaucrats. The spokesman quoting recent RBI report of these frauds said in 2017-18 frauds related to off-balance sheet operations, foreign exchange transactions, deposit accounts and cyber activity further increase the amount of fraud to Rs 41,167 crore under the NDA government.
The spokesman said that in most cases, the modus operandi of large value frauds involves opening current accounts with banks outside the lending consortium without a no-objection certificate from lenders, diversion of funds by borrowers through various means, including through associated/shell companies, lapses in credit, underwriting standards and failing to identify early warning signals. The spokesman said banking sector frauds increased sharply last year due to large value case especially major PNB fraud of Rs 14000 crore involving diamond merchant Nirav Modi and his uncle Mehul Choksi in the jewellery sector and the accused are still absconding. The spokesman criticising the NDA government for failing to nab PNB looters said that investigation agencies are slack in this connection. The spokesman further said a large number of banking frauds have also led to an increase in the NPA (non-performing assets), which had increased to Rs 10.3 lakh crore as of March.
The spokesman said such a massive bank fraud during the last one year was not possible without connivance of the politicians and bank officers. The spokesman said there was an urgent need to control the situation with stern punishment to the accused people.
