Breaking

Showing posts with label Bank Fraud. Show all posts
Showing posts with label Bank Fraud. Show all posts

Tuesday, 20 August 2019

By at No comments:
Labels: , ,

Friday, 12 July 2019

07:55

Bank Reforms to Check Frauds


Bank Reforms to Check Frauds 
Ministry of Finance
Bank Reforms to Check Frauds
Posted On: 09 JUL 2019 8:21PM by PIB Delhi
Occurrence of frauds was enabled by laxity in the financial system, and the underlying causes have been systematically dealt with by the Government through comprehensive steps for reduction in occurrence of frauds, and their proactive checking and timely detection. The steps taken in this regard include, inter-alia,the following:
  1. Government has issued “Framework for timely detection, reporting, investigation etc. relating to large value bank frauds” to Public Sector Banks (PSBs), for systemic and comprehensive checking of legacy stock of their non-performing assets (NPAs), which provides, inter-alia, that—
  2. all accounts exceeding Rs. 50 crore, if classified as NPAs, be examined by banks from the angle of possible fraud, and a report placed before the bank’s Committee for Review of NPAs on the findings of this investigation;
  3. examination be initiated for wilful default immediately upon reporting fraud to RBI; and
  4. report on the borrower be sought from the Central Economic Intelligence Bureau in case an account turns NPA.
  5. Fugitive Economic Offenders Act, 2018 has been enacted to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. The act provides for attachment of property of a fugitive economic offender, confiscation of such offender’s property and disentitlement of the offender from defending any civil claim.
  6. PSBs have been advised to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore and, decide on publishing photographs of wilful defaulters, in terms of Reserve Bank of India (RBI)’s instructions and as per their Board-approved policy and to strictly ensure rotational transfer of officials/employees. The heads of PSBs have also been empowered to issue requests for issue of Look Out Circulars.
  7. For enforcement of auditing standards and ensuring the quality of audits, Government has established the National Financial Reporting Authority as an independent regulator.
  8. Instructions/advisories have been issued by Government to PSBs to decide on publishing photographs of wilful defaulters, in terms of RBI’s instructions and as per their Board-approved policy, and to obtain certified copy of the passport of the promoters/directors and other authorised signatories of companies availing loan facilities of more than Rs. 50 crore.
  9. In order to bring transparency and accountability in the larger financial system, bank accounts of 3.38 lakh inoperative companies were frozen over the last two financial years.
The impact of the above steps is reflected in RBI’s Financial Stability Report (FSR) of June 2019. As per FSR, systemic and comprehensive checking of legacy stock of NPAs of PSBs for frauds has helped unearth frauds perpetrated over a number of years, which is getting reflected in increased number of reported incidents of frauds in recent years compared to previous years. The details of frauds of Rs. 1 lakh and above that occurred during the last three financial years (FYs), reported by PSBs to RBI, as per inputs received from RBI, are as under:
FY of occurrence
Number of cases
Amount  involved
(in crore Rs.)
2016-17
1,745
24,291
2017-18
1,545
 6,916
2018-19
  739
 5,149
Bank-wise details are at Annex.
Note: Figures cited above for PSBs include those for IDBI Bank Limited, which was recategorised as a private sector bank by RBI with effect from 21.1.2019.
This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Lok Sabha today.
 Source:PIBNEWS


0
By at No comments:
Labels: , , ,

Wednesday, 17 October 2018

07:28

Top Bank Frauds -Identifies Loop holes with suggestions for Improvements

Top Bank Frauds -Identifies Loop holes with suggestions for Improvements

CVC analyses 100 top bank frauds – identifies loop holes- suggests systemic improvements 

Central Vigilance Commission (CVC) has reviewed and analyzed Top 100 Bank Frauds, as on 2017.      
Sharing the details Dr. T.M. Bhasin, Vigilance Commissioner, CVC informed that the Commission has sub divided the study into 13 sectors comprising of Gems and Jewellery, Manufacturing, Agro sector, Media, Aviation, Service Sector, Discounting of cheques and bills, Trading sector, IT Sector, Exports sector, Fixed deposits and Demand Loan etc.
Dr. Bhasin said that as a conscious decision and with a view to maintaining discreteness, the names of borrower accounts/entities and the names of the Banks have not been disclosed in the report. However, steps are being taken for all encompassing actions such as investigation by the Premier investigative agencies, fixing staff accountability and recovery measures, etc. for effective action.
Dr. Bhasin said that the modus operandi of these loans has been thoroughly analysed and various loopholes/lapses have been identified. Based on the findings, various industry specific suggestions for systemic improvement have been given in the final report, which have also been sent to Deptt. of Financial Services (DFS)and RBI, in order to plug the loopholes observed by the Commission. The measures suggested include strengthening of SOPs, monitoring system and also highlighting the role of controlling offices, so as examine the aspect of quality of business.
Dr. T.M. Bhasin said that this analytical study was initiated by the Commission as a Preventive Vigilance measure so as to minimize the occurrence of such type frauds in future. RBI has also confirmed to the Commission that inputs given by CVC are very useful and shall be used for systemic improvements to mitigate the risks. Dr. Bhasin said that the intention of the Commission is to bring about awareness among the field functionaries by enhancing their knowledge towards the existing lapses, so that the frauds of similar nature do not recur. These studies have been done by the Commission as a preventive Vigilance tool by utilizing its vast experience of handling various cases of frauds and Staff accountability related matters.

 A copy of the Analysis of Top 100 Bank Frauds by CVC has been uploaded on CVC website for ready reference:

Source:PIBNEWS

0
By at No comments:
Labels:

Thursday, 5 April 2018

17:55

Aadhaar cannot stop bank frauds: Supreme Court

Aadhaar cannot stop bank frauds: Supreme Court

The Supreme Court on Thursday observed that Aadhaar cannot stop bank frauds, adding, officials seemingly are hand in glove with the fraudsters.
The top court's five-judge Constitution bench, headed by Chief Justice of India Dipak Misra, also observed that the Aadhaar can do little to stop it.
The Central government has made it mandatory for all financial institutions, including banks, to verify and link Aadhaar of the customers with their accounts.

0
By at No comments:
Labels: , ,

Monday, 19 February 2018

By at No comments:
Labels: , ,

Monday, 13 March 2017

08:39

RESERVE BANK OF INDIA DIRECTIONS TO COMPLAINTS WITH CBI IN CASE OF FRAUDS BY BANKS,FINANCIAL INSTITUTIONS

RESERVE BANK OF INDIA DIRECTIONS TO COMPLAINTS WITH CBI IN CASE OF FRAUDS BY BANKS,FINANCIAL INSTITUTIONS
Lodging of complaints with CBI in cases of fraud /embezzlement by commercial banks and select Financial Institutions 
Reserve Bank of India (RBI) Master Directions dated 01.07.2016 on Frauds-Classification and Reporting by commercial banks and select Financial Institutions, inter alia, provide as follows, in regard to lodging of complaints with CBI in cases of fraud /embezzlement:- 
Category of bank
Amount involved in the frauds
Agency to whom complaint should be lodged
Remarks
Public Sector Banks (PSBs)
Rs. 3 crore and above and uptoRs. 25 crore
CBI
To be lodged with Anti Corruption Branch of CBI where staff involvement is prima facie evident).
Economic Offences Wing of CBI (wherestaff involvement is prima facie not evident)
PSBs
More than Rs. 25 crore and uptoRs. 50 crore
CBI
To be lodged with Banking Security and Fraud Cell (BSFC) of CBI (irrespective of the involvement of a public servant)
PSBs
More than Rs. 50 crore
CBI
To be lodged with the Joint Director (Policy), CBI, HQ, New Delhi.
 This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

 Source:PIBNEWS



0
By at No comments:
Labels: , , , ,

Saturday, 22 October 2016

18:42

Debit card data breach: How exactly does an ATM work?

Debit card data breach: How exactly does an ATM work?

You probably have walked into a lot of ATMs and transacted on one hundreds of times. But have you ever wondered how exactly does the ATM machine work.
Automated Teller Machine or ATM is a data terminal or rather a digital interface with two input and four output devices. Like any other data terminal, the ATM has to connect to, and communicate through, a host processor.
The host processor is similar to an Internet service provider (ISP) and it is the gateway through which all the various ATM networks become available to the cardholder or in other words (the person wanting the cash). Nearly 99% of ATMs in India communicate through leased lines -- which is a high speed network. Others work on dial-up systems which are slow and are meant for low traffic areas.But before we get into all the technical aspects, one needs to understand who handles the ATM or how is maintained. Any bank that wants an ATM installed contacts an ATM-maker like NCR or Diebold Nixdorf who provides the machine and the software for the bank at its preferred location.
After the ATM is installed, the bank needs to connect it to its servers and allow it to connect to other bank servers to help a consumer get cash.
Here comes in companies like FSS, CMS and Hitachi Payment Services who provide the ‘switch’ -- a technical term for a payment transfer engine that allows the ATM software to connect to interbank networks and in turn bank servers so that it can relay information and cash as and when it is necessary. But most of the switches are placed in remote locations and in other cases bank themselves maintain the interconnection network.
For example, a branch which has an ATM is more prone to managing its own switch
Read more: Banks need to raise firewalls to protect debit cards
But what is an interbank network? An interbank network, also known as an ATM consortium or ATM network, is a computer network that enables ATM cards issued by a financial institution that is a member of that particular network to be used to perform ATM transactions through teller machines that belong to another member of the network.
While Visa, Mastercard/Maestro or Rupay are card service providers, Cirrus, Pulse, Bancs are examples of interbank networks present in the country. This simply means that these card service providers connect to services (that it subscribes or owns) such as Cirrus or Pulse when a transaction is being processed by a user in an ATM.
However, the functions which may be performed at the network ATM vary. For example, special services, such as the purchase of mobile phone airtime, may be available to own-bank but not to network ATM cardholders. Furthermore, the network ATM owner may charge a fee for use of network cards (in addition to any fees imposed by the own-bank).

0
By at No comments:
Labels: , , ,

Saturday, 15 October 2016

07:46

Case of fraud against six bank employees

Case of fraud against six bank employees

The District Crime Branch (DCB) wing has registered a case against six employees of the Pudukottai branch of State Bank of Travancore here on a charge of having committed fraud in the customers’ accounts.
Misappropriated loan amount
According to a complaint lodged with the DCB by the branch manager, Gopalakrishnan, the employees -- Sivakumar, appraiser, Charat Lal and Narasimhan, both accounts managers, Ganapathy, Joe Daniel Arokiam and Rubesh, all chief cashiers -- had misappropriated about Rs. 63.67 lakh by “pledging” fake ornaments along with gold jewels of customers while sanctioning jewel loans.
They had misappropriated the additional loan amount from 31 accounts of 24 customers.
The fraud was committed between July 13, 2015 to July 12, 2016. The fraud came to light during the course of audit, according to the complaint.
Meanwhile, panic stricken customers whose accounts had been fraudulently used by the bank employees, assembled at the branch. They said that the bank officials, whenever they came to pledge their jewels, used to get signatures in a number of jewel loan forms.
The police have registered case under Sec120 B (Criminal conspiracy), Sec. 406 (Criminal breach of trust), Sec. 409 (Criminal breach of trust by banker), Sec. 465 (Forgery), Sec. 467 (Forgery of valuable security), Sec. 468 (Forgery for the purpose of cheating) and Sec 471 (Using as genuine, a forged document) of the IPC. No arrest has been made yet.

0
By at No comments:
Labels: , , ,

Thursday, 4 August 2016

22:53

New anti-fraud payment technologies coming to Russia

New anti-fraud payment technologies coming to Russia

Visa and MasterCard, in cooperation with the National System of Payment Cards (NSPK), will introduce to Russia a new anti-fraud technology that will allow consumers to safely use Apple Pay, Samsung Pay and Android Pay.

Visa and MasterCard, together with the National System of Payment Cards (NSPK), plan to launch tokenization technology that will allow consumers to make purchases with Apple Pay, Android Pay, and Samsung Pay. A ''token'' is a unique digital identifier that replaces a client’s bank or credit card number.

Visa's chief executive officer in Russia, Ekaterina Petelina, told Vedomosti daily business newspaper that Visa and NSPK are working on launching a contactless payment technology this autumn that allows payments with mobile devices. MasterCard also plans to bring Apple Pay, Android Pay, and Samsung Pay to the Russian market.

“Tokenization technology is one of today's most important security developments because it provides the safest way of non-cash payments,” MasterCard representatives told RBTH.

With tokenization the payment terminal can scan a person's token from his/her mobile device and then pass it to an acquiring bank as a part of an authorization request. Visa said on its website that, ``tokens are secure because they can be device specific, or retail specific. A unique token is created for every device from a single account. For example, a token created for contactless use cannot be used online.''

“This is a very effective system to combat fraud because you don't need to secure your account information against exposure,'' Petelina told Vedomosti. ``Instead, you simply make such information useless to criminals. This is a completely different way of providing security.''

Visa and MasterCard first introduced tokenization technology in the U.S. in 2014, and have actively expanded it to other countries. According to MasterCard, their digital enablement services (MDES) are working in 18 European countries as of April. 

Even more innovations are coming to the realm of Russian digital commerce. 

“Russia’s largest bank, Sberbank, plans to offer client identification via video image processing by 2018,'' said Yaroslav Loginov, founder of the crypto-currency system, LibreMoney. ``You won’t have to bring a card or phone with you. It will be enough to look at the camera and just speak a confirmation word or phrase.''

Source:RBTH.com

0
By at No comments:
Labels: , , , , ,

Sunday, 3 July 2016

18:43

Indian Bank CMD in bank fraud case

 Indian Bank CMD in bank fraud case

3 years RI for former Indian Bank CMD in bank fraud case

CHENNAI: Former chairman and managing director of Indian Bank M Gopalakrishnan was sentenced to three years rigorous imprisonment in a bank fraud case.

A Kantha Kumar, Principal Special Judge for CBI Cases, convicted Gopalakrishnan, five officials of Indian Bank and four others including M Varadarajulu of MVR Group for cheating Indian Bank in the sanction of letter of credit facility to the tune of ` 2.5 crore each in favour of Anderson Industries International Ltd and Sathyam Chemicals Pvt Ltd, both sister concerns of MVR Group of companies of M Varadarajulu.

The letter of credit was issued for taking delivery of the cashew nuts  which were already imported in the name of Maxwell Exim Private Ltd and MVR Industries respectively. The letters were sanctioned by Gopalakrishnan, who was then chairman and managing director on September 30, 1995, without the receipt of regular proposals of the respective branches of Indian Bank at Nandanam and Saidapet and only on the basis of request letters. He sanctioned it without  any reports on the pre-sanction assessments, credit-worthiness, security aspects and source of repayment, CBI stated. Indian Bank suffered a loss of `4.97 crore.
CBI then filed a charge-sheet against Gopalakrishnan and a host of the then bank officials.
Out of them, Usha Devi, Directors of  Anderson Industries  International Ltd, is absconding and case against her is still pending. During the trial, one Jayaraman expired and charges against him abated. Sathyam Chemicals director K Sai Jagannathan was sentenced to undergo three years of Rigorous Imprisonment.
Kumarasamy, AR. Arunachalam, Sambasivam, M V Varadarajulu and Krishna Kumar were given two years of rigorous imprisonment and Balakrishnan, Srinivasa Raghabvan and Vasantha Rahjan were sentenced to undergo one year of rigorous imprisonment. A fine of `1.35 lakh has also been imposed on them.

0
By at No comments:
Labels: , , ,

Wednesday, 15 June 2016

08:02

Chargesheet filed by CBI in 1000 crore Syndicate bank fraud

Chargesheet filed by CBI in 1000 crore Syndicate bank fraud

CBI filed the chargesheet on the basis of a complaint received from Syndicate bank against its General Manager and others at the bank's branch in Delhi and Jaipur.

Central Bureau of Investigation has filed a chargesheet against the chief manager of Syndicate Bank at Udaipur in Rajasthan Santosh Kumar Gupta, his wife Usha Gupta and CA Bharat Kumar Bamb,under several sections of cheating and forgery.

This case was registered on 7 March 2016 on the basis of complaint received from Syndicate Bank U/s 120-B r/w 409, 420, 467, 468, 471 of IPC and Sec. 13(2) r/w 13(1)(c) & (d) of Prevention of Corruption Act against its general manager and others at New Delhi and Jaipur Syndicate Bank branch. This complaint was filed for causing an alleged loss of Rs 1000 crore (approx.) to Syndicate Bank.

WHAT IS THE FRAUD ABOUT?
As per allegations, accused persons in connivance with the bank officials committed the said fraud by resorting to discounting of fake cheques, fake bills against fake LC's and arranging overdraft limit against non-existent LIC Policies at two Jaipur Branches - Malviya Nagar and MI Road and one Udaipur Branch of Syndicate Bank. Searches were conducted on March 8, 2016 at 10 locations including Jaipur, Udaipur and New Delhi which led to recovery of incriminating documents. On March 18 2016, CBI arrested a chartered accountant of Udaipur and a businessman/real estate developer of Jaipur, in the on-going investigation of the case.

CASH RECOVERED 
During further searches, cash approximately worth Rs 66 lakh, certain electronic hard drives etc. and incriminating documents were recovered from the CA's house. Around Rs 20.98 lakh was also recovered on April 26 this year from another CA employee.

PREVIOUS ARRESTS
During the investigation, CBI arrested the chief manager of Syndicate Bank, Udaipur Branch and a private person on June 6 this year. The said private person had allegedly conspired with the chartered accountant and others by providing forged and false cheques which were used to siphon off the bank funds. The then chief manager of Udaipur Branch allegedly discounted the forged cheques presented by accused persons and exceeded his sanctioned powers while discounting the forged cheques.

It was also found that the wife of the then chief manager was allegedly involved in the conspiracy as she had received approximately Rs 5.7 crores out of the defrauded bank funds as beneficiary and co-conspirator with her husband and others. It was also found during investigation that LIC policies pledged against loans were allegedly fake. LIC policies were allegedly issued in the name of different persons for different terms and sum assured and, therefore, were found to be forged and false. After thorough investigation, CBI has filed the first chargesheet. Investigation is on to unearth the role of other accused persons in the said case.

Source:India Today


0
By at No comments:
Labels: , ,

Monday, 25 April 2016

07:58

Rajan must not be allowed to hide bank defaulters from public scrutiny

Rajan must not be allowed to hide bank defaulters from public scrutiny
It was rather surprising that the Supreme Court chief justice T S Thakur told the court on 12th April that his bench would examine if the total amount of defaults in repayment of bank loans running into lakhs of crores of rupees should be made public, without disclosing the defaulters name.
He said: "There is no confidentiality in figures, but the names may be kept out.”
Justice Thakur made this observation when the RBI counsel stoutly resisted the court's earlier stance to name and shame the big defaulters (each of whom has borrowed more than Rs 500 crore from different banks and has refused to pay back. And there are thousands of such defaulters).
Pray, Justice Thakur, why should you consider only disclosing the figures (total amount of the taxpayer's money swindled in this bank scam) and not the names of the white-collar criminals who are responsible for this crime? Why should you allow the dubious plea of the RBI to withhold the disclosure of the names of those who have borrowed money from banks to the tune of thousands of crores to set up business in India but bought properties abroad with that money?
That the RBI's plea is dubious has been conclusively established by a division bench of the Supreme Court barely four months ago. The RBI had then challenged the order of the Chief Information Commission (CIC) which had ruled that the RBI was duty-bound to disclose information about the Non-Performing Assets (NPAs) of the commercial banks under the RTI Act. The CIC had said that the exemptions from the disclosure of the information provided under the RTI act could not be applied to the banking sector.
Raghuram Rajan, the RBI governor, had challenged the CIC order in the Supreme Court. A Supreme Court bench consisting of Justice M Y Iqbal and Justice C Nagappan heard the matter. The RBI chief, through his counsel, placed two arguments: first, that the the central bank had a fiduciary relationship with the borrowers and therefore, under the RBI law, it was bound by the confidentiality clause and could not reveal the names of the defaulters. And the second argument was the following: "Disclosure of information would have adverse impact in the public confidence in the bank. This has serious implications for financial stability… This will also affect the economic interest of the state.”
After a careful consideration of all facts, the SC bench observed on December 16, 2015 that the RBI could not hide 'routine information' such as the names of top defaulters, the extent of losses suffered by banks and details of actions taken against banks from the public.
Justice Iqbal-led bench trashed the 'fiduciary relationship' argument advanced by the RBI chief. The Court said: 'the RBI does not place itself in a fiduciary relationship with the financial institutions because the reports of inspections, statements of banks and information related to business obtained by the RBI are not under the pretext of confidence or trust'.
The Justice Iqbal bench also came down heavily against the second argument of the RBI. It said: 'the RBI's contention that revealing the information to the public would harm public interest was absurd'. It went on to say: 'the facts reveal that banks are trying to cover up their underhand actions. Therefore, they are even more liable to be subjected to the public scrutiny'. This attitude of the RBI (hiding the information on banking activities from the public) will only attract more suspicion and disbelief in them, the court said.
The apex court bench's final indictment of the RBI was lethal: "We have surmised that many financial institutions have resorted to such acts which are neither clean nor transparent. The RBI in association with them has been trying to cover up their acts from public scrutiny.”
The RBI has been shown up for what it is -- that it is complicit in shielding the corrupt lenders and the fraudulent borrowers which has led to the siphoning off of 'lakhs of crores' of public money. This indictment has been made by none other than a Supreme Court bench in a detailed judgement, not in an off-the-cuff remark. And this indictment came only in last December.
Just four months have passed since then; in another public interest litigation that has come up before the apex court demanding the disclosure of the information about the big defaulters (incidentally, in both the cases the counsel for the petitioner has been the intrepid lawyer, Prashant Bhushan), the RBI governor is making the same old argument – that of fiduciary relationship and financial stability – to make the case once again for concealment of the information from the public.
As this argument has been decisively rejected by the apex court just four months ago, Raghuram Rajan's same old dubious plea should not be allowed to eat into the honourable chief justice's highly valuable judicial time. When the case comes up for discussion on April 26, Raghuram Rajan and his cohorts should be told in no uncertain terms that the RBI's shenanigans cannot be kept under wraps.
The Justice Iqbal bench had wisely observed that if people remained oblivious to the irregularities committed by the commercial banks and their regulator, the RBI, then the whole financial system of the country would be rigged and sooner or later it would lead to serious consequences for the Indian economy.
When that happens, Raghuram Rajan would be gone pursuing another high-flying international career, leaving a billion Indians bruised. Of course, some Indians (the likes of Vijay Mallyas who would flee the country when the situation gets too overheated for them to stay in India) would remain eternally grateful to him. These white-collar criminals would seek Rajan out when he travels to various international financial capitals and express their gratitude to him for shielding them from the public eye for as long as he held office.
Chief Justice T S Thakur must save the fellow countrymen from such sharks out to devour India when he takes up the matter on April 26.
0
By at No comments:
Labels: , ,

Thursday, 14 April 2016

07:50

The Central Vigilance Commission (CVC) is awaiting sanction to prosecute 98 banks officials

The Central Vigilance Commission (CVC) is awaiting sanction to prosecute 98 banks officials

Banks delay action against nearly 100 corrupt officers

New Delhi, Apr 10 () Public sector banks have delayed action against nearly 100 corrupt officers despite the uproar over cases of bank fraud and non-performing assets, according to a CVC report.
The Central Vigilance Commission (CVC) is awaiting sanction to prosecute 98 banks officials, including those at the level of Senior Manager, Chief Manager and General Manager allegedly involved in financial irregularities, for over the last four months.
Sanction for prosecution is also awaited in these 43 cases against 49 government officials. Of the 43 cases, the highest number of seven are pending with Indian Overseas Bank, two each with State Bank of India and Bank of India, and one each with Oriental Bank of Commerce, Corporation Bank, State Bank of Patiala, Exim Bank, Bank of Baroda, as per CVC's performance report for February.
As per norms, the matter of granting sanction for prosecution has to be decided within four months.
"We have been raising the issue of delay in grant of sanction to prosecute corrupt officers in various inter- ministerial meetings. But still the number of cases continue to rise. We will write again to all the departments where such cases are pending," a senior CVC official said.
Interestingly, six cases involving at least ten government officers, most of them belonging to the Indian Administrative Service (IAS), are pending with Department of Personnel and Training, which acts as the Centre's nodal authority responsible for enforcing anti-corruption measures.
Three cases each seeking sanction to prosecute corrupt officials are pending with Defence Ministry and Steel Ministry (Steel Authority of India), two each with Home, Finance, Railways, and Health and Family Welfare ministries, among others, the CVC said.
"In five cases involving eight officials (two cases pertaining to Ministry of Personnel Public Grievances and Pensions, one case of SAIL, one case of State Bank of India and one case of Bank of Baroda), Commission agreed with the departments and organisations that sanction for prosecution is not necessary. However, final action taken or decision is awaited," the probity watchdog said.
Citing a Supreme Court order, the CVC has already told all departments that "time limit of three months for grant of sanction for prosecution must be strictly adhered to. However, additional time of one month may be allowed where consultation is required with the Attorney General or any other law officer in the AG's office". AKV SK MNG

Source:TOI 
0
By at No comments:
Labels: , , ,

Thursday, 24 March 2016

22:38

RBI plans forensic audit of 10 defaulters

RBI plans forensic audit of 10 defaulters

The Reserve Bank of India (RBI) plans to conduct forensic audit of 10 defaulters to know whether lenders followed established practices and processes while sanctioning those loans, said people close to the development. The central bank may invite interests from agencies to conduct these audits by April end, said those people who did not wish to be identified.

Among the borrowers could be companies involved in mobile technology, shipping, power and roads, they said. The loan accounts vary between Rs 2,000 crore and Rs 5,000 crore.
"This is separate from the forensic investigations that banks conduct," said the person. "The scope of these investigations would include whether there were any lapses on the part of the lenders." RBI did not respond to an e-mail seeking comment.

Reserve Bank of India Governor Raghuram Rajan is determined to clean up the Indian banking system by March 2017 as their mounting stressed assets cripple their abilities to fund new projects. While many of the stressed loans (bad loans + restructured loans) may be due to the slowing economy and wrong policies, some could be due to malfeasance. The central bank is going the extra mile to differentiate between the two.

Although banks conduct their own forensic audits, they are limited in scope -probably to know whether the promo ter siphoned off funds and not whether bankers were at fault.
"Banks tend to limit the scope of investigations on what wrong the promoter did," said the person. "While the RBI wants to know if the banks were sleeping at the wheel, as they lent to these companies."

This would be the second ti me when the RBI would be directly conducting forensic audit. In 2015, RBI hired two multinational consultancies to investigate defaulters Su rya Vinayak Industries and Deccan Chronicle Holdings.

When it led to the conclusion that banks violated norms in the case of Deccan Chronicle Holdings, RBI penalised 12 banks.

In both the cases -Surva Vinayak Industries and Deccan Chronicle Holdings -at least two banks had conducted their forensic audits. "While the fine was only about Rs 5 lakh to Rs 40 lakh, this was more like rap on the knuckles," said a banker. If it is proven that in any of the 10 non-performing assets ( NPAs) banks had not followed the procedures, they may be penalised.

The audits may also be a guide to plug the gaps in bank supervision.

"I think it's not just to fine the banks that these independent investigations are carried out," said the banker. "It is also to look at whether there are any loopholes and if additional guidelines, regulations could be framed to prevent similar situations."

The regulator may avoid clashing with other investigative agencies in this matter as it would keep away from those probed by other agencies such as the Central Bureau of Investigation.

"The RBI also wants to see if there are any sectoral problems in these companies as well. But the regulator doesn't want to look into companies which may be investigated by CBI or other agencies," said the source.


0
By at No comments:
Labels: , ,

Sunday, 21 February 2016

07:20

‘SIM deactivation fraud linked to bank insiders’

‘SIM deactivation fraud linked to bank insiders’

The cyber crime wing of the Criminal Investigation Department (CID) has traced the recent spate of online bank frauds — initiated by deactivating SIM cards of bank customers and regenerating one-time password (OTP) — to the banks themselves, or rather a few unscrupulous bank employees.

Over the last few months, a network of fraudsters had siphoned off as much as Rs. 70 lakh from Bengaluru residents. The police have arrested a bank official from Hyderabad along with two other accomplices from Mumbai.

The Hyderabad bank employee has been linked to the Chickpet case where a city garment trader lost Rs. 9.62 lakh in November 2015. The police suspect that the banker leaked details of the garment dealer to the fraudsters. Investigators also suspect a similar bank connection in another case where a businessman lost Rs. 45 lakh to fraudsters.
“It is shocking how the culprits got the precise details of the complainants’ bank account and produced documents to deactivate his or her SIM card to keep them in the dark,” said an investigating officer attached to the Cyber Crime wing of the CID now probing the pattern of fraud.

Banker involved in Rs. 45-lakh fraud?
Their modus operandi was ingenious in its simplicity and highlighted flaws not just in the banking system but also from the cellphone service provider’s end, said police sources.
In another case in January 2016 that is still being investigated, a city businessman, R. Siddesh Kumar, lost Rs. 45 lakh to fraudsters who illegally made nine transactions to nine accounts in five days. The police are yet to establish whether it’s linked to the Chickpet case.

According to Mr. Kumar, a man deactivated his business cellphone number attached to the bank account by personally visiting the mobile service provider’s outlet in Jayanagar. “Posing as my manager, the culprit submitted a copy of the Aadhaar card with a changed photograph and obtained a duplicate SIM after saying that he had lost his cellphone and the card needs to be blocked immediately,” Mr. Kumar told The Hindu.
The gang soon began operating Mr. Kumar’s online account obtaining OTPs on the duplicate SIM card and transferring the money quietly. All through, Mr. Kumar’s manager assumed it was a cellphone network failure.

The Mumbai connect
On Wednesday, CID investigators arrested two men from Mira Road, Mumbai, who were identified as Rahul Patil (24), a SIM card retailer, and Afsal (46), an insurance agent, in connection with Mr. Kumar’s case. “The money was transferred to nine bank accounts, including the ones held by Rahul and Afsal who then diverted the funds to other accounts. We have questioned the duo and will apprehend their accomplices in the coming days,” added the officer. The police have managed to block and salvage Rs. 11 lakh, of the Rs. 45 lakh transferred in the case.

Investigators believe that the information leak, including confidential customer details, mobile phone numbers, information on ID proofs, could have come from a “bank insider”.

Source:BankingUpdates
0
By at No comments:
Labels: , , ,

Wednesday, 23 December 2015

18:20

Bank of Baroda fraud: How the masterminds pocketed Rs 100 cr via illegal remittance

Bank of Baroda fraud: How the masterminds pocketed Rs 100 cr via illegal remittance

The masterminds of illegal remittances racket operating through Bank of Baroda were allegedly charging Rs 1.35 for every dollar sent abroad from people who wanted to use their services.

The CBI investigation into over Rs 6,000 crore transfer (about $100 crore) to Hong Kong and Dubai through BoB Ashok Vihar Branch has indicated that the master operators were charging this premium by offering their channel to send the money outwards, the agency's chargesheet alleged.

The CBI has filed its chargesheet which reveal that nearly $100 crore were transferred from India to Hong Kong and Dubai using proper banking channel by evading the scrutiny of banking software which red flags every transaction above $one lakh.

Sources said the agency has mentioned in its chargesheet that masterminds of the racket were allegedly distributing the fee of Rs 1.35 per dollar among themselves with even the lowest rung of the gang (which were alleged account holders) made Rs 25-40 lakh in one year period from July 2014-July 2015.

"The lower rung of the gang was given 20-25 paisa per dollar transferred and during the one-year period they have made about Rs 25-40 lakh by transferring funds through banking channels," an official said.

The sources said similarly the parties in Hong Kong and Dubai to whom the money was allegedly being transferred made over Rs 35-60 lakh in commission from the well-oiled machinery which was being run.

CBI had registered a case against 59 current account holders and unknown bank officials and private persons on a complaint from Bank of Baroda.

Source:BankingUpdates
0
By at No comments:
Labels: , , ,

Saturday, 21 November 2015

16:27

HDFC bank to monitor ATM fraud transactions on real time basis

HDFC bank to monitor ATM fraud transactions on real time basis

HDFC Bank, the country’s second largest private sector lender, has come up with a solution which will allow the lender to curb fraudulent or suspicions transactions at its automated teller machines (ATMs) as and when the transaction is taking place.

The bank, in association with the National Payments Corporation of India (NPCI), has done a pilot of this project and is looking at rolling it out in the next three-six months. According to this technology, the lender will be able to map a customer’s location using that person's smartphone. If the ATM card is being used at a loacation which is at a different location from the phone, then it will raise an alert. Nitin Chugh, Head-Digital Banking, HDFC Bank, explained this was based on the assumption that most consumers carry their cellphone along while visiting an ATM.

“If you have a smartphone, the location of the phone can be identified based on the telecom towers in that area. However, if the phone happens to be in another city then it can raise an alarm and give warning signals to stop that transaction. Then we can determine whether to decline the transaction or send a confirmation call to the customer first before allowing it,” Chugh said.

The bank is yet to lay down rules regarding the distance between the ATM where the transaction is taking place and the mobile phone or whether it will be available to all debit card holders etc. The technology has been developed by Zumigo that also owns the application. However, it is unlikely that a red flag will be raised if the mobile phone is also within a 300-metre radius of where the transaction is taking place.

Considering that NPCI is also a part of this digital imitative, it is likely that other banks may also offer similar services later. However, HDFC Bank has the proof of concept in the last three months and has tested it at over 20 situations. According to Reserve Bank of India (RBI) data, in August the bank had 24.1 million debit cards and 6.4 million credit cards in circulation.

Bank fraud has been a pressing concern for banks because there has been a surge in the number of suspicious transactions. According to the Deloitte 2015 Banking Fraud Survey, 93 per cent of respondents had agreed that there had been an increase in the incidents of fraud in the banking sector over the past two years.

0
By at No comments:
Labels: , , ,

Wednesday, 28 October 2015

08:34

CBI books 'Raindrop' basmati rice producer in massive bank fraud

CBI books 'Raindrop' basmati rice producer in massive bank fraud

In probably one of the biggest bank frauds in recent times, the Central Bureau of Investigation (CBI) on Tuesday filed a case against a private rice producing company, which was once listed on the London and Singapore stock exchanges other than the BSE and co-sponsored IPL's Delhi Daredevil team in 2013.

CBI alleges that the company — REI Agro Limited, which sells basmati rice under brand name 'Raindrops' — defaulted on loans of Rs 3,814.30 crore from a consortium of 15 public sector banks led by UCO bank. Credit facilities in such huge amounts was availed by REI, 2013 onwards but the money was never returned to the banks, says CBI.

The CBI claims that the preliminary probe suggests that there was major diversion of funds from bank loans to other ventures of the company.

After registering a case of cheating, criminal conspiracy and forgery, the CBI raided the premises of REI in Delhi, Kolkata and Haryana's Rewari distict and recovered large number of documents related to the businesses of the company, 10 hard disks and rubber stamps of Andhra Bank and a Dubai-based company.

The CBI has named the firm and its directors — Sanjay Jhunjhunwala, Sandip Jhunjhunwala, N K Gupta and Krishna Daya Ghosh — in its FIR, registered on Monday.
The company could not be reached for comments.

CBI sources said that the company had allegedly created a web of shell companies to facilitate fraudulent transactions related to rice trading, and defrauded banks in India and abroad.Officials added that REI also aggressively publicised its brand on the Mumbai local trains six years back, spending huge money on marketing.

The company was reportedly formed in 1994 and for some period remained listed on London Stock Exchange and Singapore Stock Exchange. It also ran 400 super stores across India with the brand name of 6Ten.

In fact, CBI sources said that in Singapore, financial service provider Credit Suisse has sued the company for $80 million.

The company, on its website, boasts of it being the world's largest basmati rice processing and marketing company.

Source:BankingUpdates.
0
By at No comments:
Labels: , , , , ,