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Indian bank frauds up, will continue rising: Deloitte
Mumbai, Nov 25 (IANS) Rounding off the year of India’s biggest banking fraud on state-run Punjab National Bank (PNB), British professional services multinational Deloitte on Sunday said such frauds will continue to rise with banks continuing to “lack a holistic anti-financial crime compliance programme”.
According to the third edition of Deloitte India Banking Fraud Survey released on Sunday, about 84 per cent of survey respondents pointed to a substantial rise in fraud incidents.
“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,” a Deloitte statement said here.
In February, PNB reported the Rs 14,000-crore fraud on it committed by accused diamantaire Nirav Modi and his uncle Mehul Choksi, both of whom have absconded overseas.
The overwhelming majority of the Deloitte survey respondents “identified the top four types of frauds experienced by them as — fraudulent documentation, cybercrime, overvaluation/ non-existence of collateral and siphoning/ diversion of funds,” it said.
The “kind of fraud” being highlighted here perhaps indicate the ineffectiveness of existing controls to prevent such occurrences. Considering none of these frauds are new for banks (cybercrime being the exception), it is important to know why they remain prevalent,” said K.V. Karthik, Deloitte India Partner (Forensic Financial Advisory).
According to the report, the root cause responsible for increase in fraud incidents “appears to not having been adequately addressed”.
Some of the key reasons identified by the respondents for the increase in fraud incidents include, use of new technology and digital channels that have made fraud detection difficult, lack of tools to identify potential red flags and business pressures to meet targets.
“Respondents appear to have a strong Fraud Risk Management (FRM) policy on paper. However, what seems to be missing is the use of technology tools, intelligence gathering, conducting regular fraud risk assessments, fraud awareness training and workshops, vendor due diligence and social network analysis,” the report said.
“In our experience, the current fraud risk management framework and processes tend to be reactive rather than proactive in the ability to detect fraud incidents, the inability to identify emerging threats and run periodic fraud risk assessments basis those findings, as well as the limited use of technology tools,” Kartik said.
About 32 per cent of respondents indicated currently using artificial intelligence (AI) applications to detect fraudulent behaviour and/or to identify suspicious patterns and red flags.
“However, in our experience and as highlighted by the respondents, the availability of skilled talent, limited understanding of this technology and data security of AI applications are real challenges that need to be overcome in order to sustain any success experienced so far.”
In the area of stressed assets, or bad loans, responses received “indicate that banks are affected by concerns related to suspected shell companies (highlighted by 59 per cent) and lapses in the due diligence process during loan disbursement having inadvertently led to higher stressed assets (67 per cent)”, the report said.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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