REASONS OF BANKING FRAUD - A CASE OF INDIAN PUBLIC SECTOR BANKS

摘要

The number of bank frauds in India is substantial and it is increasing with the passage of time and technology. According to a survey by Ernest & Young, 2012 the banking segment witnessed around 84% of reported fraud cases within the financial services sector. The society expects accountability, fairness, transparency and effective intermediation from banks. Ensuring that they carry out their responsibilities with sincerity of purpose and devoid of fraud is an important ingredient for gaining public trust and goodwill. The study will cover the cases of frauds, map a typological trend strategy to be adopted as prevention and implementation strategies and present the same for implementation with ownership. The case is based on the primary data gathered from a nationalized bank in India. For security reason the name of the bank and the departments and personnel interviewed has been kept withheld. For rest of the paper the bank has been referred as ABC bank. Details of fraud incidents that have happened during the period 2007-2012 with ABC bank, the fraud type, fraud detection time persons who are associated with the identification of the fraud along with the fraud descriptions has been studied. On the basis of these primary data thrust areas for fraud management has been identified and finally, with IT as fulcrum, a model of fraud management for the Indian banks has been provided. Bank frauds occur due to ignorance, situational pressures and permissive attitudes. It is difficult to detect in time and even more difficult to book the offenders because of intricate and lengthy legal/judicial requirements and processes. In the fear of damaging the banks reputation often the fraud cases are not always brought to light.