Fraud In Bank Is BEYOND CONTROL

PSU banks report frauds worth almost Rs 8,850 cr in last 3 years!

Frauds in the banking sector have seen a steady rise. The country’s public sector banks have reported frauds amounting to nearly Rs 9,000 crore to the Reserve Bank of India. And this only in the last three years!

This revelation has come after questions were raised in the Lok Sabha regarding the quantum of scams in public sector banks. The numbers throw up a disturbing trend.

The country’s largest PSU, State Bank of India tops the charts with frauds to the tune of Rs 1,221 crore. Bank of India has reported frauds amounting to Rs 709 crore, Canara Bank has revealed scams worth Rs 605 crore, IDBI Bank has indicated to RBI on frauds to the tune of Rs 609 crore.Central Bank has reported frauds amounting to Rs 562 crore.

And this is not it; the entire list submitted in the Lok Sabha indicates that in the last three years, the amount involved in these frauds is a whopping Rs 8,848 crore and the cases registered are nearly 11,313.

The central bank has taken several steps to sensitize banks and curb frauds in the banking space. So after RBI learns of the fraud, they examine the case and advise the concerned bank to report the case to the CBI / police or SFIO. Also, RBI takes measures to recover the amount involved in the fraud.

The Reserve Bank has also issued several notifications sentisizing banks about common fraud prone areas. It has also issued caution notices against repeat offenders.

Public money siphoned off?

-Cases worth Rs 8,848 cr reported by PSU banks since Jan 1, 2009
-MoS fin gives details in parliament on fraud cases
-MoS fin gives details on cases reported by PSU banks to RBI
-SBI reports 2195 cases worth Rs 1221 cr since Jan 1, 2009
-Bank of India reports 776 cases worth Rs 709 cr since Jan 1, 2009
-Canara Bank reports 460 cases worth Rs 605 cr since Jan 1, 2009
-IDBI Bank reports 554 cases worth Rs 609 cr since Jan 1, 2009
-PNB reports 965 cases worth Rs 381 cr since Jan 1, 2009
-UCO Bank reports 576 cases worth Rs 323 cr since Jan 1, 2009

http://www.yourmoneysite.com/news/2012/may/psu-banks-report-frauds-worth-almost-rs-8850-cr-in-last-3-years.html

Can you really Bank on them?

B S Anilkumar, TNN | Sep 22, 2012, 06.25AM IST
Collected from Times of India 

If you thought your money is safe in banks, here's something you can chew on, albeit nervously. The facts first - Banks in Kerala together reported 471 incidents of frauds to the tune of over Rs 260 crore in the last five years, according to the Reserve Bank of India.

To a Right to Information (RTI) query, RBIhas confirmed that 36 banks operating in Kerala have reported banking frauds of over Rs 260 crore (See box) from July 1, 20007 to June 30, 2012. The magnitude of banking frauds that have taken place in the state can be gauged from the fact that the figure does not include frauds involving amounts less than Rs 1 lakh.

The banks often compensate their customers if the amount of money duped is high. However , a vast majority of account holders even fail to notice the disappearance of small amounts of money from their accounts.

According to the RBI, banks in Kerala could together recover only Rs 94 crore for the same period. The central bank has also indicated that it has no information on the number of consumers who were duped in the state.

Bankers and companies that develop anti-hacking solutions also confirm that more than 70% of banking frauds involve lesser amount of money, which is not noticed by account holders under normal circumstances . Most professional hackers who swindle money operate clandestinely and target a large chunk of customers at one go, and keep duping customers at regular intervals.

According to RBI, the Federal Bank in Kerala suffered the most number of banking frauds in the last five years. Total cases reported by the Federal Bank to RBI during the period came to 63 and the volume of such frauds amounted to Rs 71.78 crore. Of this, the bank could recover only Rs 11.3 crore.

The State Bank of Travancore comes second on the list, reporting 55 such cases involving Rs 22.39 crore. Of this, the bank could recoup only Rs 8.26 crore. The State Bank of India, the South Indian Bank and the Vijaya Bank are next in line, reporting 34, 33 and 32 banking frauds in the last five years.

While banks in Ernakulam district topped the list of banking frauds (103 cases worth Rs 108.17 crore), banks in Thiruvananthapuram district came second with 86 cases to their credit worth Rs 50.69 crore. Of the money lost to frauds, banks in Ernakulam and Thiruvananthapuram could recover only Rs 20.95 crore and Rs 41.38 crore, respectively.

With regard to electronic banking frauds, the ICICI Bank Ltd topped the list in terms of the number of frauds committed . But the Federal Bank and the Axis Bank came first in terms of volume of money lost to frauds. While the ICICI Bank reported 12 such cases and lost Rs 23.55 lakh, the Federal Bank and the Axis Bank reported two and five such instances to the RBI, and lost Rs 84.36 lakh and Rs 42.53 lakh, respectively.

As for ATM frauds in Kerala, the Axis Bank managed to recover all the money lost to frauds. Meanwhile , the State Bank of Travancore, South Indian Bank Ltd and ICICI Bank Ltd failed to reco
ver even a single paisa they lost to ATM frauds. Again, the Federal Bank came first in the lits of biggest losers with Rs 84.36 lakh. The bank managed to recover only Rs six thousand.

ATM frauds were reported from only five districts in the state during the last five years. Only three banks reported online frauds during the period. The ICICI Bank was victim of the most number of online fraud cases during the period. But, Axis Bank lost the highest amount of money to online frauds.
CIBIL launches fraud and high-risk activity information database
MONEYLIFE DIGITAL TEAM | 07/07/2010 04:35 PM |
http://www.moneylife.in/article/cibil-launches-fraud-and-high-risk-activity-information-database/6892.html

CIBIL Detect is an exhaustive repository of information on spurious activities that not only captures the methods used to commit fraud, but can also indicate whether the person or organisation was a victim of fraud or was involved in it

Credit Information Bureau (India) Ltd (CIBIL) and TransUnion together have launchedCIBIL Detect — a nationwide database of reported fraudulent and suspect activities. CIBILDetect will address the need for better collaboration and the sharing of information on fraud and high-risk activities throughout the banking and financial industry, it said in a release.

"Banks and financial institutions have been reporting rising cases of frauds and spuriousincidences. Realising the urgent requirement of an industry-wide system for fraud control, the Indian Banks' Association (IBA) entrusted CIBIL and TransUnion to develop an exhaustive repository of information on spurious activities that will not only capture the methods used to commit a fraud, but can also indicate whether the person or organization was a victim of fraud or was involved in it," said Arun Thukral, managing director, CIBIL.

In addition to reported fraudulent and suspicious activities, CIBIL Detect also contains valuable information on high-risk vendors and agents, which credit grantors can share and access. It will also keep a track of the modus operandi of individuals who have committed banking-related frauds in the past.

CIBIL Detect has been designed to help at both an organizational as well as an industry level. At an organisational level, it will act as a comprehensive nationwide repository that can be used to check if the business prospect has been involved in any spurious activity. On an industry level, CIBIL Detect will fuel the regulatory body's efforts towards creating ahealthy and sound credit culture by effectively identifying, recording and sharing information on high-risk activities.