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Bank Fraud

Posted on January 23, 2013 | No Comments
Bank Fraud

Bank Fraud

Losses by banks as a result of fraud exceed losses due to theft, robbery, burglary and theft-put together. Unauthorized credit facilities are extended for illegal gratification, as if the credit allowed against pledge of goods, the mortgage property against bills or against book debts. Common modus operandi are, pledging of counterfeit goods, inletting the value of property, mortgage property to more than one bank, fraudulent removal of goods with the knowledge and connivance of the negligence of bank staff , pledging of goods belonging to a third party. Goods mortgaged to a bank are recorded for obsolete stocks packed in between goods stocks and case of shortage of weight is not uncommon.

An analysis of the case highlights the overall under mentioned four main elements responsible for the commission of fraud in banks.

Bank fraud Analysis

Bank fraud Analysis

1. The active involvement of staff, both supervisor and clerical either independent of external elements or in connivance with the outside world.

2. The failure of the bank staff to follow meticulously planned instructions and guidelines.

3. External elements perpetuating frauds on banks by forgeries or manipulations of checks, drafts and other instruments.

4. There has been a growing collusion between business, bank executives high-level officials and politicians in power to defraud banks by obtaining the slope rules, regulations and standards thrown to the winds bank violated.

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