Central Bureau of Investigation (CBI) files suit in bank fraud case
Recently, the CBI has registered a case against the former chairman of ABG Shipyard Limited, a Surat based company, in Rs 22,842 crore bank fraud case.
Banking fraud is an attempt to obtain money or property from a financial or banking institution by illegal means.
These illegal methods include data theft, cybercrime, manipulation of books of accounts, use of forged documents, etc.
According to RBI’s ‘Trends and Progress of Banking in India’ report, 4071 cases of banking frauds have been reported in India in the first half of the year 2021-22. These cases are higher than the 3,499 cases in the year-ago period.
However, the amount involved in the fraud has come down from Rs 64,621 crore to Rs 36,342 crore.
Reasons for the increase in banking fraud include:
- Negligence in the observance of prescribed systems and procedures by the employees involved in the procedures as well as the employees who supervise them.
- Negligence in monitoring the timely receipts of controlled returns and their scrutiny by the controlling officers.
- Fraud committed by unscrupulous persons involved in the process by taking advantage of the loopholes in the system.
- Lack of regular transfer of employees.
Measures to prevent fraud:
- Public sector banks should be given functional autonomy.
- Strict adherence to Know Your Customer (KYC) norms must be ensured.
- Banks should keep monitoring all the accounts on a regular basis while being vigilant.
- People with business interests should be prevented from appearing on bank boards etc.
Source – The Hindu
