Banks lost 1078 cr due to frauds in 2007: Chidambaram

4 Mar, 2008, 2002 hrs IST, AGENCIES

NEW DELHI: Union Finance Minister P Chidambaram on Tuesday said that banks in India lost about Rs 1,078 crore due to frauds, including credit card frauds, in 2007.

"While the total number of frauds as reported by banks is increasing, there is a reduction in the total amount involved over the last three years," Chidambaram told the Rajya Sabha.

In reply to a question raised by Shobhana Bhartia and Prof Alka Balram Kshatriya on rising economic offences in banks, he said the number of bank frauds have gone up from 12,374 in 2005 to 22,280 in 2007.

However, the total amount involved in frauds declined from Rs 1,385.91 crore to Rs 1,077.84 crore during the same period, Chidambaram said.

Loss to public sector banks was Rs 793 crore due to around 3,000 frauds, followed by Rs 224 crore to private banks in over 12,000 frauds and Rs 60.75 crore to foreign banks in more than 7,000 cases last year, Chidambaram said.

In order to prevent such frauds, he said, the RBI has asked the banks to set up Fraud Prevention Task Forces, apart from constituting special committees of board members to exclusively monitor large value frauds of Rs 1 crore and above.

Referring to guidelines issued to banks by the RBI last month, Chidambaram said the financial institutions should independently assess the risk while issuing credit cards to customers.