CONTEMPORARY STATE

The last decade has witnessed a grievous rise in white collar crimes with society being subject to constant adversity. Statistics testify the disgraceful situation of recent times – albeit countermeasures are being explored to control such hazards. However, as with any other perilous damage being hurriedly followed by measures to tackle the situation – the scenario with bank frauds resembles a homogeneous outcome. Our prevention policies have always been jeopardised, carving the way for damage and, thereby, demanding countermeasures to ameliorate the situation effectively. In some cases, our reliance is on damage control as against ensuring negligible damage – gone are the days of adhering to 'prevention before cure'.

Bank frauds have caused a mammoth loss of Rs 25,775 crore in just the last fiscal year with Punjab National Bank (Rs 6,461 crore) and State Bank of India (Rs 2,390.75 crore) leading the table, followed by the Bank of India (Rs 2,224 crore), Bank of Baroda (Rs 1,928 crore) and Allahabad Bank (Rs 1,520 crore). Interestingly, this data only involves frauds above Rs 1 lakh, as per the listing disclosed by the RBI in response to an RTI filed by Chandrasekhar Gaud. As per the RBI'S response, the total value of bank frauds has gone up a frightening 1,356 per cent in the past decade and, in seven of the decades under review, nationalised banks accounted for more than two-thirds of the total amount involved in these frauds. The government has so far balanced Nonperforming Assets (NPAS) with taxpayers' money. A massive recapitalisation plan of Rs 2.11 trillion has been formulated for state-run banks to help them deal with bad debts and revive credit growth. Of the total sum, Rs 1.35 trillion will be raised through recapitalisation bonds, while the banks themselves will raise another Rs 580 billion from share sales. This sounds like a compassionate indemnity rather than a countermeasure while being miles away from resolving the underlying factors facilitating such colossal damages. As with instances of Nirav Modi and Vijay Mallya, the recognition for a framework to monitor and evaluate the banking processes lacks efficacy in desperate times. However, an important question looms over whether these monitoring units can serve a two-way purpose of also checking the tendency of an unscrupulous inside that has facilitated many such frauds. having access to sensitive data. Offers such as “Lifetime free card” and the likes are floated as artifices to lure customers, persuading them to share personal information that the bank would otherwise never demand. These tactics are primarily utilised to deceit customers and capitalise on their lack of expert knowledge. The most notable way is to apply for a new card from an existing customer's account by using sensitive information amassed through Aadhaar updates, PAN card, Whatsapp/facebook profile. Since December, there have been approximately 800 complaints lodged with the customer support across branches of a single bank with 790 of them claiming that they never applied for a new card. Further, a copy of the SIM card may be issued by the perpetrator, to gain complete access to the customer's personal information, jeopardising personal security. Often, artifices presented to trap the customers have loopholes that a layman fails to distinguish. Once they unknowingly agree to proceed with the deceit, the requirement for their documents (photo, signature, details) can be skipped – when, in reality, those are important security checkpoints to prevent the misuse of sensitive information.

That this is an inside job is validated through the modus operandi which strongly hints at fraudulence unfolding internally. Beside SIM cloning, which can be performed by anyone under the guise of anonymity, bank frauds seemingly direct towards an inside player, though negligible complaint of the same is evident in record books.