Following the liberalization of the economy in 1991 Indian banking sector has undergone significant growth and changes. Although the banking industry is well regulated and supervised, the sectors suffer from its own set of hurdles when it comes to ethical practices, financial distress, and corporate governance. In recent years noteworthy media attention has been gained by bank frauds in India. The number of recent cases of frauds involving huge amounts has imperiled the credibility of the financial system of the country. Bank frauds are essentially financial frauds.Kautilya in his famous book"Arthashastra", written around 300 BC has given a strong picture of what is termed as a fraud in modern-day. According to the association of certified fraud examiners, a global anti-fraud organization, a typical organization loses 5% of revenues fraud each year.

Fraud as a concept can be interpreted as a demeanor by which one person intends to give a dishonest advantage over another. In other words, fraud is an act aimed at causing wrongful gain to one person and wrongful loss to the other either by way of concealment of facts or otherwise. According to section 17 of the Indian contract act, 1872, fraud includes any of the following as committed by a party to a contract, or with his connivance, or by his agents, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:

● the suggestion as a fact of that was not true by one who does not believe it to be true;
● the active concealment of a fact by one having knowledge or belief of the fact;
● a promise me without any intention of performing it;
● any other act fitted to deceive;
● any such act or omission as a law specially declares to be fraudulent.
According to Dr. K.C Chakrabarty former deputy governor of Reserve Bank of India frauds reported by banks can be divided into three main subgroups :

● Technology -related
● Deposit account- related
● Advances- related
1) Technology -related frauds: Higher incidence of technology related products is not some pricing fact as there has been a remarkable shift in the service delivery model with greater technology integration in the financial service sector. A major factor behind technology related frauds is the entry of new private sector banks and foreign banks in the Indian banking scenario.

2) Deposit account- related frauds: Due to the real-time impact and relatively lower cost of the latest electronic modes of payment like NEFT and RTGS these platforms have gained considerable popularity among the people. Though transaction using these modes are based on specific ID and password both individual customer and banks have to take extra care to ensure that these channels are safe and secure. Several cases of replication of data contained in genuine debit or credit cards on two duplicate cards are being reported. The banks have the enormous task of improving the peripheral and system security in ATM locations and edit educating their customers about using their payment cards with due caution.

3) Advances related frauds: Frauds related to the advances portfolio form the largest share of the total amount of frauds in the banking sector. During the last few years, there is a sharp increase in cases involving rupees 50 crores and above. Public sector banks account for a substantial portion of the amount involved in such cases.

According to Dr. Chakrabarty, deficient appraisal system, poor post disbursement supervision, and inadequate follow-up are the three factors contributing to the growing incidence of bank frauds in India. A fool-proof and orderly information sharing mechanism between banks can go a long way towards perfecting the credit appraisal system. The importance of post disbursement supervision and follow-up is clearly revealed by the fact that the majority of fraud cases come to light during the recovery process initiated after the accounts have been classified as Non-Performing Assets. The two major forms of frauds observed during the recovery process are fraudulent title deeds or availing multiple loans against the same property or mortgaged asset. Thus there is an urgent need to curb Bank frauds.sum of the measures initiated by RBI in this direction are:

1) staff accountability
2) corporate governance
3) information sharing and
4) monitoring credit history.