The Indian banking sector reported 12,533 frauds worth Rs 18,170 crore in the 2016-’17 financial year, proxy advisory firm Institutional Investor Advisory Services said on Thursday. It said the high number of frauds could be attributed to weak internal controls at banks.

The IIAS said the Bank of Maharashtra reported the highest number of frauds at 3,893, followed by ICICI Bank and HDFC Bank. The Punjab National Bank, which is embroiled in a scam exceeding Rs 13,000 crore, reported fraudulent transactions worth Rs 2,810 crore, the Bank of India Rs 2,770 crore, and the State Bank of India Rs 2,420 crore.

The IIAS report said the quantum of frauds at the Bank of Maharashtra was 1.02% of its total assets. “Added to gross non performing assets of 19%, this means that more than one-fifth of the asset size is at risk every year due to weak controls and lack of adequate due diligence,” the firm said.

The report said the high audit fees in public sector banks were the result of a large number of branches, higher number of physical audits and implementation of interest rates prescribed by the Reserve Bank of India. “Yet, despite paying high audit fees, the quantum of fraud in public sector banks tend to be much higher,” the IIAS said. This indicated that the quality of audits needs to improve, the report said.

The proxy advisory firm added that on the other hand, the quantum of fraud at some banks such as IDFC, Dhanlaxmi Bank and DCB Bank, was less than 0.01% of their total assets.