BANKING FRAUDS IN INDIA: A DETAILED STUDY OF PUBLIC SECTOR BANKS

Introduction:Public Sector Banks (PSBs) in India are critical to the country's financial system, particularly in rural and semi-urban regions. Despite their extensive reach and role in national development, PSBs have been increasinglyvulnerable to frauds, undermining their operational efficiency and public trust.Objective of the study:This study aims to analyze the trends, patterns, and systemic vulnerabilities of banking frauds across Indian PSBsfrom 2017 to 2024. It investigates the causes of such frauds, evaluates their financial impact, and assesses theeffectiveness of existing fraud mitigation strategies.Findings:The data reveals a concerning rise in fraud cases in banks like Indian Overseas Bank, Bank of Baroda, and PNB,with CAGR values exceeding 60%. Conversely, Canara Bank and Bank of Maharashtra showed a decline,indicating effective fraud control. Regression and ANOVA analyses indicated that in most banks, the year was nota significant predictor of fraud amounts. However, a strong correlation between the number of frauds and theamount involved was observed in SBI and Canara Bank. The findings suggest varying levels of risk exposure andcontrol efficiency across banks.Conclusions:The study underscores the urgent need for strengthened fraud management in PSBs through robust internalcontrols, technology integration, and employee accountability. Enhanced monitoring, predictive analytics, andsector-wide collaboration are essential to curb fraudulent activities and safeguard the integrity of India’s publicbanking system.