Banking frauds galore, staff often colludes | delhi | Hindustan Times
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Banking frauds galore, staff often colludes

The recent fraud in Citibank, in which an employee siphoned off Rs 300 crore by duping the bank’s customers, is not an isolated case. Your money isn’t entirely safe even in public sector banks. Gaurav Choudhury & Mahua Venkatesh report. Guarding your bank account

delhi Updated: Jan 04, 2011 00:41 IST

The recent fraud in Citibank, in which an employee siphoned off Rs 300 crore by duping the bank’s customers into investing in fraudulent schemes, is not an isolated case. And your money isn’t entirely safe even in public sector banks.

The finance ministry has revealed, in response to an application by RTI activist Gopal Prasad, that over the last five years, 252 employees of 11 public sector banks helped fraudsters withdraw large sums of money through fictitious cheques.

The numbers could be higher. Several banks declined to respond to the RTI query, forwarded to them by the ministry, on one pretext or the other.

Further investigations by HT at the finance ministry and Reserve Bank revealed employees’ involvement in other kinds of fraud too — counterfeit currency, fake cheques and forged documents for loan approvals.

According to documents in HT’s possession, the authorities found that a special assistant in an unnamed public sector bank mixed Rs 4.02 crore in fake notes with genuine money in currency chests. In another case, Rs 1.85 lakh in forged notes were inserted in currency packets while sending cash remittances from one bank to another. The documents don’t mention the banks’ names or the action taken against the errant employees.

In August last year, more than Rs 50 lakh was withdrawn fraudulently from the account of the Indian Air Force in an unnamed Delhi branch of Canara Bank on the strength of counterfeit cheques. The bank later agreed to reimburse the lost amount to the IAF. In other cases also, depositors have not lost money and banks have taken the hit.

The RBI has asked banks to fix staff accountability to prevent frauds.

“We have set up a special cell to monitor all transactions above Rs 10 lakh on a daily basis. All transactions of more than R1 crore are monitored by the top management,” Indian Bank CMD TM Bhasin told HT.