Banks and financial institutions reported ₹1.42 lakh crore in fraud over the last five financial years, according to Minister of State for Finance Pankaj Chaudhary's written reply to Rajya Sabha. During this period, recovery efforts yielded ₹6,389 crore, as reported by the Reserve Bank of India. The fraud data covers commercial banks including public sector banks, private sector banks, foreign banks, small finance banks, payments banks, and local area banks. As per NDTV reports, the government has emphasized the need for stronger safeguards to prevent coercive recovery practices following a rise in complaints against recovery agencies.
As of March 31, 2026, public sector banks have filed recovery suits against 15,577 wilful defaulters and initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in 10,894 cases. Additionally, FIRs were filed in 7,173 cases. According to the minister's statement, public sector banks have recovered an aggregate amount of ₹52,360 crore from wilful defaulters during this period. The recovery process in accounts classified as fraud is described as an ongoing process, with the RBI providing aggregate recovery data for the last five financial years.
In FY26, 18,021 complaints were received against banks regarding recovery agencies, which was more than double the 8,623 complaints received in the previous year. To address these concerns, the Reserve Bank of India has directed banks, through 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. The RBI has also directed banks to avoid borrower harassment in its recent directives, as reported by NDTV.
According to the minister's statement, his ministry has been apprised by the RBI that it is not maintaining information pertaining to action taken against wilful defaulters. The recovery process in accounts classified as fraud is described as an ongoing process, with the RBI providing aggregate recovery data for the last five financial years. The data covers commercial banks and all India financial institutions based on the date of reporting, as confirmed by NDTV reports.
