Telangana ranks 3rd in bank frauds in first 9 months of FY 22; clocks Rs 13,520 Cr in 8 years

Hyderabad: Telangana has earned a dubious distinction by becoming the third state with the highest bank frauds in the country, detected in the first 9 months of financial year 2022. The state has recorded 88.60 Crore (worth) bank frauds in the first nine months of FY 2021-22. But, Maharashtra tops the list with Rs 124 Crore followed by Delhi at Rs 93 crore. Between April- December of 2021-22, the total amount involved in financial frauds is Rs 648 Crore, said the Ministry of Finance.

However, what is more, astonishing is Telangana has clocked bank frauds to the tune of Rs 13,520. 38 Crore between 2015 and 2022. The highest fraud of Rs 4145. 73 Crore was reported in 2015-16.

Pertinent to note that, Hyderabad city topped the list in the number of bank frauds in South India in 2019. These cases were primarily booked by the Hyderabad, Bengaluru, and Chennai Unit of the Central Bureau of Investigation (CBI). Fraudsters include Jewelers, Infrastructure companies, Pharmaceuticals, and stock market giants. Former TDP MP Rayapati Sambasiva Rao's company `Transitory' tops the list of fraudsters. The total amount defrauded works out to Rs 7,926 Crore. He is also said to have surpassed fugitive diamantaire Nirav Modi.

Among many jewelers booked for fraud include Meena Group. CBI has booked promoters Umesh Jethwani, his wife Hema, and son Karan for defrauding the State Bank of India to the tune of Rs 364.2 crore. Banglore unit of CBI was acting on a complaint filed by DGM of SBI. The financial fraud took place between 2015-19 when the promoters availed credit from the bank on fabricated documents and instead diverted the funds.

Having three outlets in Hyderabad, Meena Jewelers, which is engaged in trading gold, diamond, silver premium watches, and high-end mobile phones, was set up in 2001. However, six years later it was converted into a private limited company.

Stock market and trading giant Karvy fraud-C. Partha Sarathy, the chairman and managing director of Karvy Stock Broking Pvt. Ltd is currently failing trial for cheating collegiums of banks. Karvy Stock Broking Pvt. Ltd. had availed credit facilities of Rs. 137 crores by pledging securities and shares without the consent of clients and thereby misusing the power of attorney. A case was registered at CCS DD Hyderabad.

Investigation revealed that the accused had also diverted clients' funds worth Rs. 720 crores that were lying in their bank accounts linked with their trading accounts. The company is said to have taken credit facilities from several other banks and NBFCs to the tune of about Rs. 680 crores by pledging clients' securities without their consent. In this regard, SEBI had banned Karvy in 2020. Several criminal cases were registered at CCS DD Hyderabad against the company and others.

Not too long ago, ED Enforcement Directorate (ED) has provisionally attached 15 immovable properties worth more than Rs 13.51 Crore in M/s Servomax India Private Limited bank fraud case. Hyderabad-based M/s Servomax India Private Limited (SIPL), its promoters/directors namely Venkateswara Rao Avasarala, Poreddy Chandrasekar Reddy, Director & others for alleged cheating and defrauding Public Sector Banks to the tune of Rs. 402 Crore.

Following a direction from the Reserve Bank of India, the government instituted a wide range of reforms to check on bank frauds. This includes a legacy of non-performing assets which has led to the detection of perpetual fraudsters.

"As per the RBI data, the aggregate amount involved in frauds in commercial banks during the last six years amount to Rs 2,62,575 Crore," Dr. Bhagwat Karad- Minister of state- Finance, told Rajya Sabha

Recovery-According to the RBI data, in the last six financial years, an amount of Rs 7,34,542 Crore has been recovered by attaching non-performing assets of fraudsters.