The amount involved in bank frauds saw a quantum jump in 2017-18 to Rs 41,000 crore against about Rs 23,000 crore in the previous year, as per Reserve Bank of India's latest annual report.

Further, the number of cases on frauds reported by banks, which was generally hovering at around 4,500 in the last 10 years, increased to 5,835 in 2017-18.

The central bank observed that the quantum jump in the amount involved in frauds during 2017-18 was on account of a large value fraud committed in gems and jewellery sector, mainly affecting one public sector bank (Punjab National Bank).

During 2017-18, public sector banks (PSBs) accounted for 92.9 per cent of the amount involved in frauds of more than Rs 1 lakh, as reported to the Reserve Bank, while the private sector banks accounted for 6 per cent.

As regards cumulative amount involved in frauds till March 31, 2018, PSBs accounted for around 85 per cent, while the private sector banks accounted for a little over 10 per cent. At the system level, frauds in loans, accounted for more than 75 per cent for an amount of Rs 1 lakh and above, while frauds in deposit accounts were at just over 3 per cent.

Within the loan category of frauds, PSBs accounted for a major share (87 per cent) followed by the private sector banks (11 per cent). RBI said the share of PSBs in frauds relating to ‘off-balance sheet items’ such as Letter of Credit, Letter of Undertaking, and Letter of Acceptance was even higher at 96 per cent.

New private sector banks accounted for more than 20 per cent of the frauds related to ‘cash/cheques/clearing’ and ‘foreign exchange transactions’. New private sector and foreign banks accounted for 36 per cent each of all cyber frauds reported in debit, credit and ATM cards, among others.

Out of the seven classifications of frauds in alignment with the Indian Penal Code, ‘cheating and forgery’ was the major component followed by ‘misappropriation and criminal breach of trust’.

In ‘cheating and forgery’ cases, the most common modus operandi was multiple mortgage and forged documents. Mumbai (Greater Mumbai), Kolkata and Delhi were the top three cities in reporting of bank frauds through ‘cheating and forgery’.

In respect of staff involvement in frauds, banks reported that it was prominent in the ‘cash’ and ‘deposit’ categories, which had a much smaller share in the overall number of fraud incidents and the amount involved.

According to the central bank, one of the major initiatives in recent times in fraud mitigation was the introduction of a Central Fraud Registry, a web-based online searchable database of reported frauds, for the use of banks