Indian bank frauds up, will continue rising: Deloitte

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, over-valuation/ 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 KV Karthik, Deloitte India Partner (Forensic Financial Advisory).

Key reasons for the increase in fraud incidents included, use of new technology and digital channels that have made fraud detection difficult.