Bank frauds

| Updated on September 05, 2019 Published on September 05, 2019


This refers to the editorial ‘Tip of the iceberg’ (September 5). The alarming growth in advances-related frauds in banks is really disturbing and derails the reform package in the form of large-scale recapitalisation proposed by the government. The present state of bank frauds can be attributed on one hand to the fact that many unscrupulous perpetrators are exposing the lacuna in technology, along with the lack of technical knowledge and skills at the operation and managerial levels on the other.

There has been a humongous mismatch between various complex loan products developed by the banks and the skills of manpower in subsuming the technical content and application, resulting in misuse of technology by vested interests. Unless banks step up skilling at the operation level and bring in multilayer checks and balances, the rise in frauds cannot be arrested.

Sitaram Popuri


Safety measures

Apropos the editorial ‘Tip of the iceberg’ ( September 5). Banking is exposed to frauds, especially loan-related ones. Loan-related frauds contribute considerably to bad assets and eat away the capital of the banks, necessitating capital infusion, at the cost of the exchequer in the case of the public sector banks. The rise in the frauds to ₹71,543 crore in 2018 indicates the failure of banks in executing appropriate risk evaluation methods to stave off the frauds from occurring.

Nevertheless, the extensive adoption of technology, oversight by internal audits and inspection, the execution of preventive measures, and the on- and off-site surveillance of the banking regulator in frauds are not uncommon due to the active collusion of the bank staff with the outsiders. The laxity on the part of the auditors and inspectors to unearth the lapses in the compliance of norms and policies of the bank and the hidden divergence in prudential norms on asset classification and income recognition must attract accountability.

The board and the CVO of banks must extend top priority to prevent frauds rather than engaging outside agency for forensic audit after the loss take place.

VSK Pillai


Transport sector

With reference to ‘Truckers on the warpath with NoTruck4Me campaign’ (September 5). Sales of passenger cars and commercial vehicles is a fair indicator of direction and growth of the economy. Not just these two segments, but the sales of two- and three-wheelers have also slowed down considerably in last few quarters. This campaign of not buying any new trucks for next three months brings more bad news for the economy. All the demands of AIMTC or AITWA may not be met, but some, like the reduction in GST rates and 2 per cent TDS on cash withdrawal should be heard. When the Bharat-VI stage vehicles will roll out in seven months, the government and all other stakeholders need to be on same page and resolve all concerns as like auto sales, CV sales are equally critical for the revival of economy.

Bal Govind


Political intervention

This refers to ‘Bank unions seek West Bengal CM’s help to rescind PSB merger process’ (September 5). It goes without saying that the reaching out of Kolkata-based Allahabad Bank and United Bank of India to the West Bengal CM Mamata Banerjee is a highly injudicious and unprecedented move.

In fact, if one goes by the contents of the AIBOC’s memorandum submitted to Mamata: “We beseech your intervention to ensure that the draconian and retrograde decision to merge these PSBs is rescinded and also urge upon your good office to lead a movement to halt the entire process of merger,” it could reasonably be construed as a call for brazenly politicising even this solely administrative decision of the Centre. It no wonder that Banerjee has reportedly consented to take up the issue. However, one wishes that the Bank Officers’ Union should have approached the apex court instead of adopting the political route for redressal of their grievances

Kumar Gupt


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Published on September 05, 2019
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