The average size of frauds has dwindled to around Rs 7 lakh from the ones that involved crores of rupees till a few years ago. The biggest contributor to small frauds is housing loans. Banks disbursed home loans worth a whopping Rs 80,000 crore (Rs 800 billion) in 2005-06.

A senior Indian Banks' Association official said, "Frauds are happening in newer areas like housing loans. Earlier, a bank would get defrauded of, say, Rs 25 crore, and the concerned bank would have to take a big hit in its books. The amounts involved in frauds now are very small and banks do not feel the pinch. But the aggregate is still huge."

On an aggregate basis, the amounts swindled have remained at around the same level over the last five-six years.

In 2004-05, commercial banks reported to the Reserve Bank of India [Get Quote] nearly 10,500 frauds involving almost Rs 800 crore (Rs 8 billion), compared with over 2,000 frauds entailing Rs 700 crore (Rs 7 billion) in 2000-01.

The increasing incidence of frauds in banks has prompted IBA to constitute an ad-hoc group, which will meet on a quarterly basis to share information on frauds.

The self-regulatory of the banking sector decided to provide a platform for sharing information on frauds as the Basel-II compliance norms require banks to have adequate checks and controls to prevent frauds.

The IBA official said the frauds are now scattered and a bank providing the modus operandi of newer frauds it faces would help alert other banks.

In most instances of home loan frauds, banks have found the concerned real estate developers to be the brains behind the deceit to get cheaper loans for themselves, the official added.

The ad-hoc group makes available a forum for banks to exchange information on frauds, which IBA can compile into standard formats highlighting the key aspects of the frauds.