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November 26, 2018

Banking frauds in India up by 20% in two years

The number of banking frauds in India has soared by 20% in the past two years, according to a survey report from Deloitte Touche Tohmatsu India.

The survey indicates the significant increase in such incidents despite the recent crackdown of the government on defaulters.

According to the third edition of Deloitte India Banking Fraud Survey, around 84% of the respondents opined rise in fraud incidents.

In a statement, Deloitte said: “Frauds are on the rise (and will continue to rise). Banks appear to be underestimating their ability to prevent frauds and this may impact the nature of anti-fraud compliance programmes being developed.”

Details of Indian banking fraud survey

The survey stated that most of the banks do not possess necessary forensic analytics tools to identify frauds.

It also added the advancement of technology and increased usage of digital mediums have made fraud detection harder. The pressure of meeting targets is also said to be another reason behind growth of banking frauds.

Deloitte partner and financial services lead, forensic financial advisory KV Karthik was quoted by Livemint.com as saying: “The rise in the fraud instances is primarily due to ineffectiveness to curb such instances and the detection is still to become proactive.”

Most of the respondents said that documentation forgery, cybercrime, overvaluation/ non-existence of collateral and siphoning/ diversion of funds are the most common frauds experienced by them.

The report added that the key reason for increase in frauds is the inability to address banking frauds adequately.

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