The era of 1990 to 2010 saw a tremendous increase in cases of corporate frauds in India raising questions as to the efficacy of corporate governance norms in India and certainly Banking institutions has been no exception to this. The banking institutions have seen a tremendous growth and challenges since 1990 due to liberalization and privatization. Even though it is a well regulated institution with RBI being the regulator, the sector still suffers from various challenges such as ethical practices, corporate governance etc. This research article primarily examines certain aspects of corporate fraud in relation to banking institutions. First, what factors have contributed to the increasing frauds in the banking institutions. Second, what the economic effects related to these frauds. Lastly, concerns over the effectiveness of corporate governance in India in the light of available legislations and guidelines to the effect. The analysis is being carried out in the right of recent ICICI-Videocon scam which has again brought to light the loopholes in the governance of big corporate entities of which the advantage is taken by the higher ups such as CEOs of the company.