The Hindu Business Line : Banking blues

The incident that French Bank, Societe Generale SA, was defrauded to the tune of a whopping $7.2 billion has only exposed the monetary vulnerability the financial sector is facing now.

The offender, a close trader with the bank, looted money through unauthorised transactions by hacking into computers using log-ins of colleagues.

Banks in India are vulnerable to such financial crimes. The banking industry makes money by taking risks. But if banks fail to manage the risks, it may be heading for trouble. Banks are already spending a lot of money in the geographical expansion of their branches amid cut-throat competition from other financial organisations.

If banks turn a blind eye to the possible inside financial crimes, wide social ramifications are very much on the cards.

In this context, banks will never cater to the financial needs of the customers. Finally, customers end up losing all the money locked up in banks, let alone their faith and confidence in banks.

Therefore, banks should opt for new fool-proof systems with the loopholes of the past in mind to ensure that the highly informative data is not being misused by the unauthorised insiders.

P. S. Saravana Durai Tuticorin

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