Home Scam/Fraud Why bank frauds like the Rs 22,800-crore ABG Shipyard scam keep happening...

Why bank frauds like the Rs 22,800-crore ABG Shipyard scam keep happening in India

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India’s biggest banking fraud at ABG Shipyard – nearly double the scale of the 2018 scam involving diamantaire Nirav Modi – has once again exposed the vulnerabilities in India’s banking system.

A lack of regulation, flawed lending policies and an inefficient fraud monitoring mechanism are among the factors that have frequently led to instances of fraud and a rise in non-performing assets.

In the past few years, the Reserve Bank of India and the central government have taken steps to resolve the industry’s pain points, but clearly not enough.

A shift towards digital banking and limited use of technology to detect loopholes, especially at a time when the Covid-19 pandemic has forced employees to work from home, have increased the need for concerted efforts by authorities to prevent mishandling of public money.

What happened?

On February 14, the Central Bureau of Investigation booked Gujarat-based ABG Shipyard,…

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