More India Bank Frauds Revealed

Over 25,800 fraud cases involving about Rs179 crore ($1.79 billion) related to credit/debit cards and Internet banking were reported in India up to December 21, 2017, the parliament was informed.

“As per the data provided by Reserve Bank of India on frauds related to ATM/credit/debit cards and net banking as reported by the banks, 10,220 cases of fraud were reported in the December 2017 quarter (up to December 21),” IT Minister Ravi Shankar Prasad said in a written reply to the Rajya Sabha (Lower House of parliament), news outlets reported.

The amount involved was Rs111.85 crore in the said quarter, he added. Prasad said 7,372 cases were reported in September quarter; 5,148 cases in June quarter; and 3,077 cases in March quarter of 2017, with the amount involved adding to Rs67.13 crore.

In 2016, 3,156 cases and 4,147 cases were registered in the September and December quarters, respectively. The amount involved—in these two quarter was—Rs 45.50 crore, the minister said. As per the state-wise details of frauds involving amount of over Rs1 lakh, Maharashtra topped the list of credit/debit card and Internet banking-related frauds in the fiscal 2016-17 with 380 cases involving Rs12.10 crore.

Haryana ranked second with 238 cases (Rs8.27 crore), followed by Karnataka (221 cases worth Rs9.16 crore), Tamil Nadu (208 cases worth Rs4.38 crore) and Delhi (156 cases worth Rs3.43 crore).

It has not been long since the Punjab National Bank fell victim to India’s biggest bank fraud involving alleged embezzlement of funds worth nearly Rs 1.8 billion. Famous jewelers Nirav Modi and his uncle Mehul Choksi, being the main culprits, were indicted after they were off-bounds. Yet a new finding has revealed credit/debit cards and net banking frauds in India is still one of the biggest concerns for the banking industry, Dazeinfo.com reported.

In the wake of these embezzlement crimes, financial authorities and payment system operators have been advised to enhance security and employ mitigation measures for the card-based online transactions.

These incidents have put a dark spot on the Indian banking authorities. The common man’s financial freedom is being compromised. The information available till now highlights failures at different levels–internal controls, poor regulatory capabilities, corporate governance and the unaware masses.

Banks shouldn’t overlook the potential threats caused by such fraudulent activities. A research by IIM-B, titled “Frauds in Indian Banking Industry”, has proposed recommendations to reduce future occurrences of frauds in the Indian banking sector. The recommendations were not announced to the public.