INTERNATIONAL JOURNAL OF PROFESSIONAL STUDIES

Banks act as engines that steer the processes of money markets, the financial sector and economic growth. The Indian banking sector has expanded at a fast pace, especially as we stand today on the brink of the fourth industrial revolution. However, this has not come without its due share of complications. Along with the swiftly growing banking industry, frauds in Indian banks have seen a rising trend and there is an urgent need to revamp the banking sector in India, given the scams involving crores of rupees being unearthed in the recent past. The present study makes an attempt to review and analyze the trend of frauds plaguing the banking sector and its role in the continuous rise of Non- Performing Assets in the India. Further the study endeavors to throw light on the impact of rising bank frauds on profitability of the banking sector in India. The study concludes that the number of frauds plaguing the Indian banking sector is on a constant rise in recent years leading to a rise in NPAs and severely impacting profitability of the banking sector in India. Stringent action by authorities along with finding new means of fraud prevention and reduction is the only way forward for safeguarding the credibility of Indian banks and giving a face - lift to the banking sector of the country. Financial institutions are playing vital role for the development of Indian economy, particularly banks. Banks are those financial institutions those are registered under banking regulation Act 1949 to render various financial services to its customers such as receiving of savings and paying it on customers demand. In this ways banks acted as an intermediary in channelization of saving of the nation for the industrial purposes. Frauds means dishonest act or behaviour through which one person gains an advantage over another which results in the loss of the victim directly or indirectly. Now a day’s frauds relating to banks are playing game in the dream of the public. Rs. 9000 Crores fraud and money laundering case by Vijay Malya, business tycoon of India and the Diamond star Nirav Modi’s Punjab National Bank scam of Rs. 13,000 Crores encourages us to understand the concept of banking frauds and its impact on Indian economy. Banks are performing its activities with public savings. Offences relating to banking activities are not confined to banks but have a harmful impact on their customers and society at large. The data used for the study purpose are collected from secondary sources such as from published journals, bulletins and working papers on banking frauds by different authors. In conclude some recommendations have been made to minimize the banking frauds in future course of action in commercial banks providing services in India.

Keywords: Non-Performing Assets; Profitability; Banking; Frauds; Assets; Indian Economy