Scams in Banking Industry
Scams in Banking Industry
Scams in Banking Industry
STD: TYBBI
INTRODUCTION
• Banks are essential part of the Indian economy.
• While the primary responsibility for preventing frauds lies with banks themselves.
4 FIs 77 279.08
• Computer fraud:- Hacking, tampering with a diskette to gain access to unauthorized areas and
give credit to an account for which the funds were not originally intended.
• Loan fraud:- When funds are lend to a non –borrowing customer or a borrowing customer
that has exceeded his credit limit.
• Credit card fraud :- Credit card fraud is when someone uses your credit card or credit account
to make a purchase you didn't authorize. Fraudsters can also steal your credit card account
number, PIN and security code to make unauthorized transactions, without needing your
physical credit card.
• Voice Phishing:- Voice phishing is also known as vishing. In this fraud, fraudsters pose saying
they are from a reputed Organization and ask your personal banking details. After collecting your
personal banking information, they use it steal money from your bank account.
Reporting of frauds to RBI
• Frauds involving amount of less than Rs.1.00 lakhs :Less than Rs 1.00 lakhs are not to be reported individually to the RBI.
• Frauds involving amount of 1.oo lakhs and above 25.00 lakhs but less than 25.00 lakhs should be reported to the regional
• Frauds involving amount of 25.00 lakhs and above should be reported to central frauds monitoring cell, department of banking
supervision , RBI.
NOTE:
This bank scam is being called the biggest scam (Rs 11,400 crore) in
the banking sector of India. The main accused of the scandal is
billionaire jeweller Nirav Modi and his uncle Mehul Surakshi (owner of
Gitanjali James). Both of them had received "Letter of Undertaking"
from the consent of the employees of PNB’s Mumbai branch and
withdrawn the funds from the foreign banks on the guarantee of Punjab
National Bank. However, the Enforcement Directorate has seized
assets of Nirav worth over Rs 5870 crore.
2. Bank Scam by Vijay Mallya: