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The Hindu editorial 2 with meanings 20.4.21

The U.K. Home Secretary Priti Patel’s reported decision to allow fugitive diamantaire Nirav Modi’s extradition to India, three years after state-owned Punjab National Bank admitted it had been defrauded to the tune of over ₹14,000 crore, serves as a reminder of the urgent need to address the banking system’s vulnerability to fraud. India’s lenders have had to contend not only with a sizeable share of sour loans but also a growing number and cumulative value of frauds. The RBI noted in its latest Annual Report, in August last year, that the total number of cases of fraud (minimum size of ₹1 lakh) at banks and financial institutions rose 28% by volume and surged 159%, or more than 2.5 times, by value to ₹1.85-lakh crore in the 12 months ended March 31, 2020. While the ongoing COVID-19 pandemic may have likely slowed the cognisance of frauds since then, the trend from the preceding years is deeply troubling from multiple perspectives. With frauds mainly occurring in the loan portfolio, the RBI observed that there was “a concentration of large value frauds, with the top 50 credit-related frauds constituting 76% of the total amount”. Also, despite the central bank having created a framework to facilitate the prevention, if not early detection and prompt reporting of such frauds, the average lag in detecting these transactions was 24 months during 2019-20. And most disturbing was the RBI’s finding that in cases of sizeable fraud, where the sum involved exceeded ₹100 crore, the average lag was 63 months, or more than five years.

While the public sector banks (PSBs) have had to bear the brunt of the hit from fraudulent borrowing — they accounted for an almost 80% share in 2019-20 — the private sector lenders outpaced their peers both in terms of number of cases and the increase in value of frauds. Even granting that fraud at a single private lender skewed the increase in cumulative value of transactions that year, a fivefold surge in value to ₹34, 211 crore was on the back of a 34% jump in the number of fraud cases at these banks while the PSBs suffered only a 24% increase. These facts are especially germane when one considers that the government has been on mission mode in trying to expedite consolidation among the PSBs and is ultimately looking at opening up the sector as a whole to greater private sector participation. With the RBI lamenting the ‘weak implementation of early warning signals’, non-detection of signals during internal audits and non-cooperation of borrowers during forensic audits as being among the key factors leading to delayed detection of fraud, the impending concentration of risk in fewer lenders is far from reassuring. The fallen jeweller’s case is only the symptom of a deeper malady. The RBI as industry regulator needs to walk the talk and ensure tighter oversight. Any laxity threatens overall financial stability.


1.Fugitive (N)-a person who flees, esp. from arrest or pursuit. भगोड़ा

2.Extradition (N)-the act of making someone return for trial to another country or state where they have been accused of doing something illegal. प्रत्यावर्तन

3.Cumulative (Adj)-increasing by one addition after another.प्रतिवर्धन

4.Bear The Brunt Of (Phrase)-to suffer the worst part of an unpleasant or problematic situation.समस्यापरक स्थिति का सर्वाधिक दुर्भाग्यपूर्ण भाग

5.Outpaced (V)-to move or develop faster than someone or something else. तेज़ी से बढ़ना

6.Peers (N)-equal standing with another.समस्थिति

7.Skewed (V)-to distort or misrepresent.विकृत या दुर्प्रस्तुति

8.Germane (Adj)-relevant to a subject under consideration.विचाराधीन विषय से संदर्भित

9.Expedite (V)- to accelerate the process or progress of.कुछ त्वरित करना

10.Lamenting (V)-to express sadness and feeling sorry about something.दुख व्यक्त करना


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