Corruption in Bank Loan Schemes
Analyze the recent bank loan fraud cases involving significant amounts of money.
- PNB Scam (Nirav Modi, Mehul Choksi): Fraudulent issuance of Letters of Undertaking (LoUs) worth over $2 billion, exploiting loopholes in SWIFT messaging and lack of core banking integration.
- DHFL Scam: Dewan Housing Finance Corporation Ltd. allegedly siphoned off ₹31,000 crore through fake loans, shell companies, and fund diversion.
- ABG Shipyard Fraud: Involved in ₹22,842 crore fraud by misusing credit facilities, diverting funds, and manipulating financial statements.
- PMC Bank Crisis: Concealed bad loans worth ₹6,500 crore to HDIL, violating RBI norms and causing massive depositor losses.
- Common Issues: Weak internal controls, poor due diligence, collusion between bank officials and borrowers, and inadequate regulatory oversight.
- Impact: Erosion of public trust, increased NPAs, stricter banking regulations, and financial instability.
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5 days ago