Realising that the Covid-19 pandemic could spawn ‘innovation’ in financial crimes, State Bank of India (SBI) has asked its operating units to be vigilant against criminals, who may try to open new accounts containing terms such as ‘Covid / Corona’ and in the name of charitable institutions/Non-Governmental Organisations (NGOs).
This move comes in the backdrop of concerns that the situation arising out of Covid-19 may be exploited by criminals, especially cyber-criminals, to indulge in fraudulent activities, money laundering, terrorism financing, and other forms of financial crimes.
Given that the Covid-19 situation has substantially restricted the conventional criminal activities, SBI impressed on its units that more and more criminals may resort to cybercrime and also innovate to exploit the situation.
‘Covid / Corona’ accounts
Referring to the possibility of fraudsters trying to open new accounts containing terms such as ‘Covid / Corona’, the bank reasoned that this may be done either to resemble an existing genuine account for public benefit, or with the intention of defrauding people through bogus fund raising / diversion /misdirection of funds.
Hence, the bank asked its operating units to apply extra due diligence while opening such accounts and perform know-your-customer (KYC) check thoroughly. Branches have been told to verify such accounts, which have been opened since February 2020.
The bank’s units (branches) will keep an eagle eye while dealing with entities registered under the Foreign Contribution Regulation Act, Non-Profit Organisations, charitable institutions, and other accounts in which donations in the name of Covid are being credited.
Fake charities
In a communication to its units, SBI observed that instances of malicious or fraudulent activities, cybercrimes, fund raising in the name of renowned organisations/ NGOs and fake charities targeting gullible personsmay increase in the Covid-19 pandemic environment.
Hence, branches need to be more vigilant while opening accounts in the name of charitable institutions/ NGOs. KYC and customer due diligence measures are required to be strictly followed while onboarding customers.
While the country is busy fighting the Covid-19 pandemic, some of the States continue to face terrorist activities. So, branches situated in such States have been asked to exercise vigilance against suspicious financing activities and scrutinise KYC in all those accounts where any suspicious transactions are observed as criminals / terrorists may try to open accounts through fake names and IDs.
Adverting to the possibility of criminals impersonating as government / police/ health officials and trying to obtain personal banking information from banks and misuse it for personal gains, the bank asked the units to properly identify the officials seeking information, which is normally not provided.