Frauds in the Indian Banking Industry

24 Pages Posted: 3 Mar 2016

See all articles by Charan Singh

Charan Singh

Indian Institute of Management (IIMB), Bangalore

Deepanshu Pattanayak

Indian Institute of Management (IIMB), Bangalore

Divyesh Dixit

Indian Institute of Management (IIMB), Bangalore

Kiran Antony

Indian Institute of Management (IIMB), Bangalore

Mohit Agarwala

Indian Institute of Management (IIMB), Bangalore

Ravi Kant

Indian Institute of Management (IIMB), Bangalore; National Institute of Technology (NIT), Jamshedpur

S Mukunda

Indian Institute of Management (IIMB), Bangalore

Siddharth Nayak

Indian Institute of Management (IIMB), Bangalore

Suryaansh Makked

Indian Institute of Management (IIMB), Bangalore

Tamanna Singh

Indian Institute of Management (IIMB), Bangalore; Indian Institute of Technology (IIT), Kharagpur

Vipul Mathur

Indian Institute of Management (IIMB), Bangalore

Date Written: March 2, 2016

Abstract

The Indian banking sector has experienced considerable growth and changes since liberalisation of economy in 1991. Though the banking industry is generally well regulated and supervised, the sector suffers from its own set of challenges when it comes to ethical practices, financial distress and corporate governance. This study endeavours to cover issues such as banking frauds and mounting credit card debt, with a detailed analysis using secondary data (literature review and case approach) as well as an interview-based approach, spanning across all players involved in reporting financial misconduct. The report touches upon the case of rising NPAs in the past few years across various scheduled commercial banks, especially public sector banks. The study finally proposes some recommendations to reduce future occurrence of frauds in Indian banking sector. The credibility of third parties such as auditing firms and credit rating agencies is also questioned in the study and is believed to be a significant contributor amongst other causes, such as oversight by banks and inadequate diligence.

Keywords: Non-performing assets, Stressed assets, Banking frauds

Suggested Citation

Singh, Charan and Pattanayak, Deepanshu and Dixit, Divyesh and Antony, Kiran and Agarwala, Mohit and Kant, Ravi and Mukunda, S and Nayak, Siddharth and Makked, Suryaansh and Singh, Tamanna and Mathur, Vipul, Frauds in the Indian Banking Industry (March 2, 2016). IIM Bangalore Research Paper No. 505, Available at SSRN: https://ssrn.com/abstract=2741013 or http://dx.doi.org/10.2139/ssrn.2741013

Charan Singh (Contact Author)

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India
080-26993818 (Phone)

Deepanshu Pattanayak

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Divyesh Dixit

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Kiran Antony

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Mohit Agarwala

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Ravi Kant

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

National Institute of Technology (NIT), Jamshedpur ( email )

NIT Campus, P.O .RIT Jamshedpur
Jamshedpur, Jharkhand 831014
India
+91-657-2407642 (Phone)
+91-657-2382246 (Fax)

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S Mukunda

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Siddharth Nayak

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Suryaansh Makked

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Tamanna Singh

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

Indian Institute of Technology (IIT), Kharagpur ( email )

Kharagpur
IIT Khragpur
Kharagpur, IN West Bengal 721302
India

Vipul Mathur

Indian Institute of Management (IIMB), Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India

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