Page 32 - BANKING FINANCE APRIL 2017

ARTICLE

3. Fraud cases involving amount of Rs.300.00 lacs and 9. Number of frauds, where final action has been taken
above and upto Rs.2500.00 lacs to CBI, as detailed be- by the bank and cases disposed off.
low:
10. Preventive/punitive steps taken by the bank during the
a) Where staff involvement is prima facie evident - CBI year to reduce/minimize the incidence of frauds.
(Anti Corruption Branch)
11. Whether systems and procedures have been examined
b) Where staff involvement is prima-facie not evident to ensure that weaknesses are addressed.
- CBI (Economic Offences Wing)
12. Analysis of fraud according to different categories of
4. All cases involving more than Rs.2500.00 lacs upto
classification of fraud, and also the, different business
Rs.5000.00 lacs - Banking Security and Fraud Cell (BSFC) areas indicated in the quarterly report on frauds out-
of the respective centers, which is specialized cell of the standing (vide FMR-2).
EOW of the CBI for major bank fraud cases.
13. Detail analysis of frauds of Rs.1.00 lac & above
5. All cases involving more than Rs.5000.00 lacs - Joint
14. Number of cases (with amounts) where staff are in-
Director (Policy), CBI,HQ, New Delhi.
volved, and the action taken against the staff.
Review of frauds: 15. Region-wise/Zone-wise/State-wise break up of frauds

Annual Review of Frauds reported during the financial year and amount involved. Time taken to detect frauds
to be placed before the Board of Directors, before the end (Number of cases detected within Three Months, Six
of next quarter i.e. June 30th, as per RBI guidelines. The Months and One Year of their taking place).
main aspects which shall be taken into account while mak-
ing such a review will include the following: Forensic Audit /Transaction Surveillance
1. Whether the systems in the bank are adequate to de- 1. One of the main issues of detecting frauds in banks is
tect frauds, once they have taken place, within the the sheer volume of transactions that take place and it
shortest possible time. is simply not practical to review every single transac-
2. Modus operandi of major frauds reported during the tion manually, for suspicious activity. Forensic data
year along with their present position. analysis can help the Bank analyze vast volume of data
to identify underlying trends relating to transactions
3. Whether frauds are examined from staff angle and,
that have taken place.
wherever necessary, the cases are reported to Vigilance
Department for further action. 2. Banks shall make a beginning in the area of forensic
auditing through Introduction of a Transaction Surveil-
4. Estimated loss to the bank during the year on account
lance System.
of frauds, amount recovered and provisions made.
5. Whether frauds are examined from staff angle and,
wherever necessary, the cases are reported to Vigilance
Department for further action.
6. Whether frauds have taken place because of laxity in
following the systems and procedures or loopholes in
the system and, if so, whether effective action has been
taken to ensure that the systems and procedures are
scrupulously followed by the staff concerned or the loop-
holes are plugged.
7. Whether frauds are reported to the local Police/CBI/
EOW for investigation.
8. Position with regard to frauds reported to the Police/
CBI/EOW.

32 | 2017 | APRIL | BANKING FINANCE

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