Banks, financial institutions reported fraud of Rs.1.42 lakh crore in last 5 years: Finance Ministry informs Parliament

PSBs recovered over Rs.52,360 crore from wilful defaulters, while fraud account recoveries remained significantly lower

July 21, 2026

Bank fraud cases mount as recovery trails losses

Banks and financial institutions reported fraud of Rs.1.42 lakh crore in the last five financial years, and recovery to the tune of Rs.6,389 crore was made during the period, Parliament was informed on Tuesday.

In a written reply to the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary said his ministry has been apprised by the RBI that it is not maintaining information pertaining to the action taken against wilful defaulters.

However, as per data reported by public sector banks, as on March 31, 2026, suits for recovery were filed against 15,577 wilful defaulters and action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act was initiated in 10,894 cases.

Besides, FIRs were filed in 7,173 cases.

As on March 31, 2026, public sector banks have recovered an aggregate amount of Rs.52,360 crore from wilful defaulters.

Further, he said, recovery in accounts classified as fraud is an ongoing process, and as per RBI data, an aggregate recovery of Rs.6,389 crore was made in such accounts during the last five financial years.

“As per Reserve Bank of India (RBI) inputs, during the last five financial years, an aggregate amount involved in frauds, based on the date of reporting in Commercial Banks and All India Financial Institutions, was Rs.1,42,112 crore,” Chaudhary said.

Commercial Banks include public sector banks, private sector banks, foreign banks, small finance banks, payments banks, and local area banks.

In reply to another question, Chaudhary said, in FY26, 18,021 complaints were received against banks regarding recovery agencies, which was more than double the 8,623 complaints in the previous year.

To strengthen safeguards and accountability to protect borrowers from coercive recovery practices, the RBI has directed banks, vide a notification dated November 28, 2025, that they shall not resort to undue harassment and have a due diligence process for engagement of recovery agents, he said.

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