Banking Fraud In India: A Study On Legal Remedies And Institutional Accountability
- IJLLR Journal
- Sep 17
- 2 min read
Janvi Kumari, Lovely Professional University
ABSTRACT
Banking frauds have emerged as one of the most pressing challenges confronting the Indian financial sector, not only because of the massive economic losses they generate but also because of the serious erosion of public trust in financial institutions. The last two decades have witnessed a surge in high-profile scams ranging from corporate loan defaults and Ponzi schemes to trade-based frauds and cross-border laundering. These cases have been exemplified by the Punjab National Bank scam, the Kingfisher Airlines loan scandal, the Saradha Ponzi scheme, the Rotomac Global case and the Winsome Diamonds fraud- This all have collectively exposed the systemic vulnerabilities in India’s banking ecosystem. The study critically examines the typologies of such frauds, their modus operandi and the loopholes that allowed them to thrive, while simultaneously exploring the role of regulators, banks and enforcement agencies in detecting and responding to them. Unlike earlier scholarship that often limits itself to descriptive accounts, this paper offers a blend of legal reasoning, institutional critique and people-centred analysis, placing the issue of accountability at the forefront. By weaving together case law, statutory frameworks, and comparative insights, the research highlights the pressing need for doctrinal reform, technological safeguards and stronger governance mechanisms. It argues that unless accountability is broadened to include institutional responsibility and not merely individual blame, the cycle of fraud will persist. Ultimately, the paper contributes to the discourse on financial integrity in India by presenting a holistic framework for prevention, detection and redressal of banking frauds.
Keywords: Banking Frauds in India, Corporate Governance, Financial Regulation, Reserve Bank of India (RBI), Ponzi Schemes, Non-Performing Assets (NPAs), Enforcement Directorate (ED), Securities and Exchange Board of India (SEBI), Money Laundering, Judicial Oversight.
