Economic Slowdown Triggering Frauds

Posted by Ask Bank ifsc code on December 11th, 2019

No sector apart from India’s banks showed the damage from economic offenses. Punjab & Maharashtra Co-operative Bank is the biggest example for it. The PMC bank fraud is responsible for the deaths of 9 account holders. Banking frauds are dramatically growing for the past decades according to a report from Reserve Bank of India.

RBI estimated that the amount involved in frauds (of above Rs.1 lakh) in Indian banks at Rs.71,543 crore in 2018-19, up by 74% from Rs.41,168 crore in 2017-18. The 2017-18 figures itself is a four-fold increase compared to four years ago.

More reports related to this matter states that public sector banks fraud have continued to increase in the present financial year 2019-20. State Bank of India faces the highest amount of frauds costing Rs.25,417 crore in the terms of public sector banks. Punjab National Bank and Bank of Baroda are the immediate follow ups with loss of Rs.10,822 crore and Rs.8,273 crore respectively.

Big cases of bank frauds are only giving the picture of one part of the economic offenses. Apart from these many other triggers are also occurring behind the shadows. 2017 report of the National Crime Records Bureau shows that there is an increase of 111.3 crimes per million people. These offenses include ATM frauds, fake currency and deceived over the phone illegally.

One of the main reasons stated by the government in 2016 demonetization is the doubt of terror funding with counterfeit notes. Still according to NCRB, the value of fake currency seized stood at Rs.28 crores and more than half of this currency was in fake replica of new Rs.2,000 note.

Information technology industry of India is also suffering from the slowdown. It came to light that nonpayment of salaries and no final settlement forcing employees of small and medium IT companies of Pune to file complaints at Labour Commissioner Offices. Forum for IT employees (FITE) requested the officials to provide justice in such cases as “more employees are coming forward to report the widespread illegal exploitation of IT employees.” The statement further states, “It is extremely challenging and stressful situation for employees to sustain their life without salary in metro cities like Pune or for that matter anywhere in the country.” Situations like this can lead to fraudulent increase if not taken care of with immediate actions.

X cities like Mumbai and Delhi cover the most part of the financial offenses. And in this situation of slowdown, theories suggest that some firms which are struggling in growth facing debts are tempted to draw in fraud actions. The government of India should come up with the solid regulations and policies to get the growth back on the track.

Source of Article- Search Bank IFSC Code