Bank Frauds In India-An Analysis

The growing number of bank frauds in India is a serious matter which adversely impact the working of banks, markets and payment system. These also shake the confidence in the banking system and the integrity and stability of the economy. Besides a sharp growth in the number of frauds and the amount involved in them during the recent past, innovative approaches have been adopted by the culprits which goes difficult to detect and prevent 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 mechanism in banks. But these need to be supplemented by strengthening professionalism and corporate governance &business ethics, besides promoting education and training in banks. More importantly, efforts are called for creating seriousness among the bank staff in dealing with frauds. Appreciating this felt need, the article is specially written for bank officers to develop a fair understanding of bank frauds by discussing analysis of frauds, modus of operandi, Know Your Principles for prevention of frauds, measures taken by Government and RBI, present arrangements for investigation of frauds in banks and suggestions to strengthen the machinery in banks for detection and prevention of bank frauds