Financial criminals in India are given a relatively soft treatment in India, say experts. As a result, we don’t learn lessons from financial crimes.
“When the CEO of a large company like Enron is put behind the bars, it sends the right signal that financial frauds is no less a crime,” said Sumit Makheja, associate vice president (forensic services), PricewaterhouseCoopers. “But in India many times you see financial fraudsters somehow slip through or even get released on bail soon.”
Some of the major economic frauds include the Harshad Mehta scam, the CRB scam involving Roop Bhansal and the initial public offering scam — popularly known as the Rupalben scam — which the capital markets regulator Securities and Exchange Board of India (SEBI) unearthed in late 2005.
While jurisdiction of economic frauds vests with the concerned regulatory authorities like SEBI and Reserve Bank of India, the Serious Fraud Investigations Office takes up acute cases.
When the case in point is more complicated and of a multi-jurisdictional nature, an agency like the Central Bureau of Investigation (CBI) is called in.
However, the silver lining is that despite the presence of a huge unregulated over-the-counter credit contracts market, the number of banking frauds in India are way behind those in several developed countries, experts say. The main reason: stringent credit appraisal system.