Page 25 - Banking Finance January 2020

COVER STORY

BANK FRAUDS

IN INDIA-

ANALYSIS

Abstract: in banks. More importantly, efforts are called for creating
seriousness among the bank staff in dealing with frauds.
The growing number of bank frauds in India is a serious
matter which adversely impact the working of banks, Appreciating this felt need,, the article is specially written
for bank officers to develop a fair understanding of bank
markets and payment system. These also shake the
frauds by discussing analysis of frauds, modus of operandi,
confidence in the banking system and the integrity and
Know Your Principles for prevention of frauds, measures
stability of the economy. Besides a sharp growth in the
taken by Government and RBI, present arrangements for
number of frauds and the amount involved in them during
the recent past, innovative approaches have been adopted investigation of frauds in banks and suggestions to
by the culprits which goes difficult to detect and prevent strengthen the machinery in banks for detection and
prevention of bank frauds
them, Appreciating the seriousness of the issue, both the
Government and RBI have been initiating steps from time
to time to ensure effective detection and prevention Introduction:
mechanism in banks. But these need to be supplemented Fraud' under Section 17 of the Indian Contract Act, 1872
by strengthening professionalism and corporate governance includes any of the acts committed by a party to a contract,
&business ethics, besides promoting education and training or with his connivance, or by his agents, with intent to
deceive another party thereto or his agent, or to induce
About the author him to enter into the contract. In the context of banking
business, 'Bank Fraud' is defined in the Report of Reserve
Dr V S Kaveri Bank of India (RBI) Working Group on Information Security,
Retired Faculty, Electronic Banking, Technology Risk Management and Cyber
NIBM
Frauds , 2011 which reads: 'A deliberate act of omission or
commission by any person, carried out in the course of a

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