Urban Co-Operative Banks Reported Nearly 1,000 Frauds Worth Over Rs 220 Crore In 5 Years

In response to an RTI query by PTI, the Reserve Bank of India (RBI) said that urban co-operative banks have reported nearly 1,000 cases of fraud worth more than Rs 220 crore in the last five fiscal years.

Of these, a total of 181 fraud cases involving Rs 127.7 crore were noticed during 2018-19, the central bank said. In 2017-18, 99 cases involving Rs 46.9 crore were reported, whereas 27 cases with Rs 9.3 crore involvement were notified in 2016-17.

As many as 187 cases of fraud involving Rs 17.3 crore were reported in 2015-16 and 478 such cases involving Rs 19.8 crore during 2014-15, as per the response to the RTI (Right To Information) application filed by PTI with RBI.

From 2014-15 to 2018-19, a total of 972 cases of bank fraud worth Rs 221 crore were reported by Urban Co-operate Banks in India.

The query assumes significance amid the PMC (Punjab and Maharashtra Co-operative) bank case. The Mumbai-based bank has been placed under operational restrictions by the RBI since 23 September 2019 after it found financial irregularities.

It was found that PMC Bank has considerable exposure to the troubled realty company HDIL (Housing Development Infrastructure). Of its overall loan book of Rs 8,880 crores, the co-operative bank's loans to HDIL stood at around Rs 6,500 crore, accounting for 73 percent of the total.

The report further stated that the 1,544 urban co-operative banks in India have deposits of Rs 4.84 lakh crore as on 31 March 2019.

In December, RBI issued guidelines to strengthen its supervisory control over these banks. Among other norms, urban co-operative banks with deposit size of Rs 100 crore and above would require placing a Board of Management in addition to Board of Directors and will also need to seek approval from RBI for the appointment of their CEOs.