A Study on Financial Frauds in Banking Sector in India
In India, after independence banks are playing a crucial role in socio-economic progress of the country. The banking sector is dominant in India as it accounts for more than half the assets of the financial sector. Indian banks have been going through a fascinating phase through rapid changes brought about by financial sector reforms, which are being implemented in a phased manner. In a modern economy, banks are to be considered not as dealers in money but as the leaders of development. They play an important role in the mobilization of deposits and disbursement of credit to various sectors of the economy. The banking system reflects the economic health of the country. The strength of an economy depends on the strength and efficiency of the financial system, which in turn depends on a sound and solvent banking system.
Owing to advancement in ICT, the sector besides serving to primary and secondary services, it also extended its services to third party products. However, with the increase in banks’ functionality there is a drastic increment in the frauds. In spite of various observations and regulations being introduced to reduce the frauds by the RBI, still it is observed that frauds are being committed. The present study focus on the number of frauds being committed bank wise, sector wise and its impact on the performance of the banks based on secondary data.