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Introduction
In recent years, instances of financial fraud have regularly been reported in India.
Although banking frauds in India have often been treated as cost of doing business, post
liberalisation the frequency, complexity and cost of banking frauds have increased
manifold resulting in a very serious cause of concern for regulators, such as the Reserve
Bank of India (RBI). RBI, the regulator of banks in India, defines fraud as “A deliberate
act of omission or commission by any person, carried out in the course of banking
in banks, resulting into wrongful gain to any person for a temporary period or otherwise,
In the last three years, public sector banks (PSBs) in India have lost a total of
Rs. 22,743 crore, on account of various banking frauds. With various measures initiated
by the RBI, numbers of banking fraud cases have declined, but amount of money lost has
increased in these years. Prima facie, an initial investigation in these cases has revealed
involvement of not only midlevel employees, but also of the senior most management as
was reflected in the case of Syndicate Bank and Indian Bank. This raises serious concern
over the effectiveness of corporate governance at the highest echelons of these banks. In
addition, there has been a rising trend of non-performing assets (NPAs), especially for the
PSBs, thereby severely impacting their profitability. Several causes have been attributed
to risky NPAs, including global and domestic slowdown, but there is some evidence of a
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The robustness of a country’s banking and financial system helps determine its
production and consumption of goods and services. It is a direct indicator of the well-
being and living standards of its citizens. Therefore, if the banking system is plagued with
high levels of NPAs then it is a cause of worry, because it reflects financial distress of
a great extent from these problems, and this served as the prime motivation for the
authors to carry out this detailed study of frauds in the Indian banking system and
A bank is a business. But unlike some businesses, banks don’t manufacture products
or extract natural resources from the earth. Banks sell financial services such as car loans,
home mortgage loans, business loans, checking accounts, credit card services, certificates
safe place to keep their money. Others are seeking to borrow money to buy a house or a
car, start a business, expand a farm, pay for college, or do other things that require
borrowing money.
India’s state-run lenders and its banking regulators, along with the government and
taxpayers, must be glad that February has ended. The month saw a string of frauds and
scams being exposed across the country, translating to a loss of nearly $2.5 billion to the
system. This included those perpetrated by jewellers Nirav Modi and Mehul Choksi,
Rotomac’s Vikram Kothari, and Simbhaoli Sugars. What may have added to the sector’s
woes is the government’s reaction, which may have sprung from the desperation to be
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seen acting decisively. But first, here’s a brief look at each of the scams that rocked the
1.2.1 Definition
Banking
The business of the banking has been defined in Section 5(b) of the Act as follows:
“Accepting for the purpose of lending or investment of deposit of money from public,
Bank fraud
Bank fraud is the use of potentially illegal means to obtain money, assets, or other
fraudulently posing as a bank or other financial institution. In many instances, bank fraud
is a criminal offence. While the specific elements of particular banking fraud laws vary
depending on jurisdictions, the term bank fraud applies to actions that employ a scheme
or artifice, as opposed to bank robbery or theft. For this reason, bank fraud is sometimes
Fraud, under Section 17 of the Indian Contract Act, 1872, includes any of the following
acts committed by a party to a contract, or with his connivance, or by his agents, with
intent to deceive another party thereto or his agent, or to induce him to enter into the
contract:
The suggestion as a fact, of that which is not true, by one who does not believe it to
be true;
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The active concealment of a fact by one having knowledge or belief of the fact;
• Fraud by insiders
• Fraud by others
Forged documents are often used to conceal other thefts; banks tend to count their
money meticulously so every penny must be accounted for. A document claiming that a
transferred or invested can therefore be valuable to a thief who wishes to conceal the
minor detail that the bank's money has in fact been stolen and is now gone.
DD fraud is usually done by one or more dishonest bank employees that is the Bunko
Banker. They remove few DD leaves or DD books from stock and write them like a
regular DD. Since they are insiders, they know the coding, punching of a demand draft.
These Demand drafts will be issued payable at distant town/city without debiting an
account. Then it will be cashed at the payable branch. For the paying branch it is just
another DD. This kind of fraud will be discovered only when the head office does the
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branch wise reconciliation, which normally will take 6 months. By that time the money is
unrecoverable.
Fraudulent loans
One way to remove money from a bank is to take out a loan, a practice bankers
would be more than willing to encourage if they know that the money will be repaid in
full with interest. A fraudulent loan, however, is one in which the borrower is a business
declares bankruptcy or vanishes and the money is gone. The borrower may even be a
non-existent entity and the loan merely an artifice to conceal a theft of a large sum of
1.2.2.b)Fraud by others
Thieves have altered cheques to change the name (in order to deposit cheques
intended for payment to someone else) or the amount on the face of a cheque (a few
strokes of a pen can change 100.00 into 100,000.00, although such a large figure may
Instead of tampering with a real cheque, some fraudsters will attempt to forge a
depositor's signature on a blank cheque or even print their own cheques drawn on
accounts owned by others, non-existent accounts or even alleged accounts owned by non-
existent depositors.
The cheque will then be deposited to another bank and the money withdrawn before the
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Stolen cheques
Some fraudsters obtain access to facilities handling large amounts of cheques, such as a
mailroom or post office or the offices of a tax authority (receiving many cheques) or a
corporate payroll or a social or veterans' benefit office (issuing many cheques). A few
cheques go missing; accounts are then opened under assumed names and the cheques
(often tampered or altered in some way) deposited so that the money can then be
withdrawn by thieves. Stolen blank cheque books are also of value to forgers who then
Accounting fraud
In order to hide serious financial problems, some businesses have been known to use
fraudulent bookkeeping to overstate sales and income, inflate the worth of the company's
assets or state a profit when the company is operating at a loss. These tampered records
are then used to seek investment in the company’s bond or security issues or to make
fraudulent loan applications in a final attempt to obtain more money to delay the
illusion of being a desired customer, the company regularly and repeatedly uses the bank
to get payment from one or more of its customers. These payments are always made, as
the customers in question are part of the fraud, actively paying any and all bills raised by
the bank. After certain time, after the bank is happy with the company, the company
requests that the bank settles its balance with the company before billing the customer.
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Again, business continues as normal for the fraudulent company, its fraudulent
customers, and the unwitting bank. Only when the outstanding balance between the bank
and the company is sufficiently large, the company takes the payment from the bank, and
the company and its customers disappear, leaving no one to pay the bills issued by the
bank.
Cheque kiting
account, the money is made available immediately even though it is not removed from
the account on which the cheque is drawn until the cheque actually clears. Deposit 1000
in one bank, write a cheque on that amount and deposit it to your account in another
bank; you now have 2000 until the cheque clears. In transit or non-existent cash is briefly
A cheque is cashed and, before the bank receives any money by clearing the cheque, the
money is deposited into some other account or withdrawn by writing more cheques. In
many cases, the original deposited cheque turns out to be a forged cheque. Some
perpetrators have swapped checks between various banks on a daily basis, using each to
cover the shortfall for a previous cheque. What they were actually doing was check
kiting; like a kite in the wind, it flies briefly but eventually has to come back down to the
ground.
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Credit card fraud
Credit card fraud is widespread as a means of stealing from banks, merchants and
clients. A credit card is made of three plastic sheet of polyvinyl chloride. The central
sheet of the card is known as the core stock. These cards are of a particular size and many
data are embossed over it. But credit cards fraud manifest in a number of ways.
They are:
It is feared that with the expansion of E-Commerce, M-Commerce and Internet facilities
being available on massive scale the fraudulent fund freaking via credit cards will
Booster cheques
card account in order to "bust out" or raise the amount of available credit on otherwise
legitimate
credit cards. The amount of the cheque is credited to the card account by the bank as soon
as the payment is made, even though the cheque has not yet cleared. Before the bad
cheque is discovered, the perpetrator goes on a spending spree or obtains cash advances
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until the newly “raised" available limit on the card is reached. The original cheque then
These take a number of forms varying from individuals using false information to
hide a credit history filled with financial problems and unpaid loans to corporations using
accounting fraud to overstate profits in order to make a risky loan appear to be a sound
investment for the bank. Some corporations have engaged in overexpansion, using
borrowed money to finance costly mergers and acquisitions and overstating assets, sales
or income
payment site; the email directs the user to a forged web site which is designed to look like
the login to the legitimate site but which claims that the user must update personal info.
The information thus stolen is then used in other frauds, such as theft of identity or online
auction fraud.
A number of malicious "Trojan horse" programmes have also been used to snoop on
Internet users while online, capturing keystrokes or confidential data in order to send it to
outside sites.
Money laundering
The term "money laundering" dates back to the days of Al Capone Money laundering
has since been used to describe any scheme by which the true origin of funds is hidden or
concealed. The operations work in various forms. One variant involved buying securities
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(stocks and bonds) for cash; the securities were then placed for safe deposit in one bank
and a claim on those assets used as collateral for a loan at another bank. The borrower
would then default on the loan. The securities, however, would still be worth their full
amount. The transaction served only to disguise the original source of the funds.
Paper currency is the usual mode of exchange of money at the personal level, though
in business, cheques and drafts are also used considerably. Bank note has been defined in
Section 489A. If forgery of currency notes could be done successfully then it could on
one hand made the forger millionaire and the other hand destroy the economy of the
nation. A currency note is made out of a special paper with a coating of plastic laminated
on both sides of each note to protect the ink and the anti forgery device from damage.
More over these notes have security threads, water marks. But these things are not known
to the majority of the population. Forged currency notes are in full circulation and its very
difficult to catch hold of such forgers as once such notes are circulated its very difficult to
But the latest fraud which is considered as the safest method of crime without making
physical injury is the Computer Frauds in Banks. Computerization of banks had started
since 1994 in India and till 2000/4000 banks were completely and 9000 branches have
been partially computerised. About 1000 branches had the facilities for International bank
Transaction. Reserve Bank Of India has evolved working pattern for Local area Network
and wide area Network by instituting different microwave stations so that money
transactions could be carried out quickly and safely. The main banking tasks which
computers perform are maintaining debit credit records of accounts, operating automated
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teller machines, and carry out electronic fund transfer, print out statements of accounts
• Hi-tech crime
The information technology is changing very fast. the normal investigator does
not have the proper background and knowledge .special investigators have to be created
to carry out the investigations. the FBI of USA have a cell, even in latest scenario there
has been cells operating in the Maharashtra police department to counter cybercrimes.
C.B.I also have been asked to create special team for fighting cybercrimes.
• International crime
A computer crime may be committed in one country and the result can be in
another country. there has been lot of jurisdictional problem an though the Interpol does
help but it too has certain limitations. the different treaties and conventions have created
nations".
• No scene crime:
The computer satellite computer link can be placed or located anywhere. The
usual crime scene is the cyber space. The terminal may be anywhere and the criminal
need not indicate the place. the only evidence a criminal leaves behind is the loss to the
crime.
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• Faceless crime:
The major advantage criminal has in instituting a computer crime is that there is
There are certain spy software’s which is utilized to find out passwords and other vital
entry information to a computer system. The entry is gained through a spam or bulk mail.
The existing enacted laws of India are not at all adequate to counter cybercrimes. The
Indian Penal code, evidence act, and criminal procedure code has no clue about
computers when they were codified. It is highly required to frame and enact laws which
would deal with those subjects which are new to the country specially cyber law;
The Reserve Bank of India has come up with different proposals to make the way easier,
they have enacted electronic fund transfer act and regulations, have amended, The
Reserve Bank of India Act, Bankers Book Evidence Act etc., experience of India in
very much imperative that the state should seek the help of the experienced and
developed nations
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1.2.3 Flow chart of procedure post fraud detection and reporting in
PSB’s
Report post
Report Investigation
FRAUD Detection Vigilance
CVC
Department
Report post
Senior
Investigation
Management
Report
Senior
Management
Decision
Internal External
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1.3. Outline of the Problem
1.3.1. Objectives
1.3.2. Scope
This study will help to the society to prevent the banking frauds.
This study will also help to the banks to secure their account holders.
As the main research participants the information will help in understanding the causes, risks
and the strategies that can be used to combat fraud. The banks will be able to see the how this
affects their overall profitability and can use this information in regards to any new
This research will shed light on the possible types of bank frauds and will help them in
understanding and therefore enlighten them on how to avoid falling victim. This will ensure
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1.3.4 Limitations
1) The study has certain time limit, money limit and individual limit.
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Chapter 2:- Review of Literature
Indian Bank's Association (IBA) Chairman and Managing Director, Indian Bank.
Shown banking sector frauds have been in existence for centuries, with the earliest
inflated assists etc. Over the years, frauds in the sector have become more sophisticated
and have extended to technology based services offered to customers. The Indian banking
sector too is experiencing the pain due to increase in fraud incidents with 93% of our
survey respondents indicating that fraud has grown over the last two years. A majority of
survey respondents indicated that they have experienced more than 50 fraud incidents in
the retail banking segment in the last two years (average fraud loss of around INR 10 lakh
per incident) and an average of 10 fraud incidents in the non-retail segment (average loss
amount close to INR 2 crore per incident). This is a significant jump compared to the
survey findings of the previous edition of the Deloitte India Banking Fraud Survey report
2.2. An Investigation of Banking Cyber Frauds with Indian Private and Public
Sector Banks, Dr.Ashvine kumar Research guide, Associate, (proff. Hindu institute
of management in Sonipat.)
Certainly the use of technology in the financial services sector for their development has
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carried out due to heavy reliance on electronic and digital equipment, a serious threat to
the safety and reliability of financial operations is imposed. With the growing trend of
online and cyber transactions, banking scandals, the number of banking technology tool
use is increasing more and more people are affected. Online payments, ATM machines,
electronic cards and net banking transaction fraud has become a serious issue. Damage to
people and institutions, electronic money transaction after the tight security measures,
these cyber banking firms is due to fraud every year. Causing huge losses to the bank
itself to its customers on a large scale has been found to be involved in fraudulent
big way causing their customers enormous losses. This study is an effort to review and
analyze the subject in Indian context with a comparative touch between private and
studied the size and area of business that organizations operate in, they are constantly
exposed to bank fraud risk. Bank fraud is the loss resulting from inadequate or failed
internal processes, people and systems, or from external events. Overall, fraud is an
important concern in the Kenyan banking industry, even if the loss figures are not
proportionately on a large scale. The overall loss to the bank was primarily from low-
volume. However, the senior banking personnel seemed to be very aware of fraud and its
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2.4. Frauds in the Indian Banking Industry, (Charan Singh, Deepanshu Pattanayak-
March 2016) RBI Chair Professor Economics & Social Science Indian Institute of
Management Bangalore
studied The Indian banking sector has experienced considerable growth and changes
since liberalisation of economy in 1991. Though the banking industry is generally well
regulated and supervised, the sector suffers from its own set of challenges when it comes
to ethical practices, financial distress and corporate governance. This study endeavours to
cover issues such as banking frauds and mounting credit card debt, with a detailed
analysis using secondary data (literature review and case approach) as well as an
misconduct. The report touches upon the case of rising NPAs in the past few years across
various scheduled commercial banks, especially public sector banks. The study finally
sector.
2.5. K C Chakrabarty: Fraud in the banking sector – causes, concerns and cures
Dr. Rana Kapoor, President, ASSOCHAM and MD & CEO, Yes Bank; Shri M. J.
Joseph, Additional Secretary and Chief Vigilance Officer, Ministry of Corporate Affairs,
Ms. Preeti Malhotra, Chairperson, ASSOCHAM National Council for Corporate Affairs;
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senior members from the financial services industry; delegates to the conference;
members of the print and electronic media; ladies and gentlemen. It is a pleasure to be
here this morning to deliver the inaugural address at the National Conference on
“Financial Frauds-Risk & Prevention.” 2. We all know that fraud, and more so, the
financial frauds have been in existence for a very long time. Some may be surprised, but,
it is interesting to note that Kautilya, in his famous treatise “Arthashastra” penned down
around 300 BC, painted a very graphic detail of what we, in modern times, term as
“fraud”. Kautilya describes forty ways of embezzlement, some of which are: “what is
realised earlier is entered later on; what is realised later is entered earlier; what ought to
be realised is not realised; what is hard to realise is shown as realised; what is collected is
shown as not collected; what has not been collected is shown as collected; what is
collected in part; what is collected is of one sort, while what is entered is of another sort.
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Chapter 3. Research Methodology
3.1. Introduction
knowledge. One can also define research as a scientific and systematic search for
investigation.
particular topic, subject or area of investigation backed by the collection, compilation and
Descriptive research includes surveys and facts-finding enquiries of different kinds. The
present. In social science and business research we quite often use the term Ex post facto
research for descriptive research studies. The main characteristic of this method is that
the researcher has no control over the variables; he can only report what has happened or
what is happening
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3.4 Sampling Design:-
3.4.1 Population:
Simple random sampling technique was used to select the respondents from the sampling
frame.
1. Primary Data:-
In this method the various information was gather for the very first time or we can say
questionnaire. This primary data collection was major part of field survey.
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2. Secondary Data:-
Secondary data was collected from books, business journal, websites & different research
Primary will be collected through the structured questionnaire and the Secondary data
will be collected from various website & research papers. The data collected will further
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Chapter 4:- Data Analysis & Interpretation
1 21 to 25 52 25.12
2 26 to 30 41 19.80
3 31 to 35 67 32.36
4 Above 35 47 22.72
Interpretation:-
From the chart it is clear that most of the respondents were between the age of 31 to 35.
This was because most of the people in this age group have good source of earnings &
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Table 5.2- Do you have Bank Account?
2. No 00 00
Yes
No
100%
Interpretation:-
We can see from the graph that all the respondent had bank account in the banks.
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Table No. 5.3 What Is your Occupation?
1. Business 49 23.67
3. Housewife 03 01.45
4. Professionals 45 21.74
5. Student 37 17.87
6. Other 00 00
Business
18%
24% Service/ Job
Housewife
22% Professionals
Student
35%
Other
1%
Interpretation:-
From the graph researcher interpreted that 35.27% are job holder, 23.67% are have an
business, 21.74% are professionals, 17.87% are students while housewife are 1%.
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Table 5.4- What is your monthly household Income?
30 26.09
25
20
15
Series1
10 6.28
5 1.93
0
Less than 10000 10000 to 20000 20000 to 30000 30000 to 100000 More than
100000
Interpretation:-
According to the opinion of the respondent majority of respondent i.e 33.33% were
earning between 30000- 100000 monthly. It was also observed that 32.37% of
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Table 5.5 How long have you been Associate with Bank?
2. 1- 6 Months 13 06.28
Interpretation:-
As per the responses obtain from the respondents it can be said that 64.25% bank holders/
respondents were associated with the single bank from more than 5 years it could because
they were working from long period of time in the company’s pay the salary in bank
accounts only. While 28.5% of the respondent were associated with the similar bank for
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Table No. 5.6 Which of the following type of account do you have?
2. Current Account 93
3. Joint Account 45
4. Recurring Account 21
5. Other 3
Respondents Accounts
140
120 127
100
93
80
60
45 Series1
40
20 21
0 3
Saving Account Current Account Joint Account Recurring Other
Account
Interpretation:-
As observed from the graph majority of the respondents were having savings bank
account it could be because the respondents were job holders and they were getting their
salary in the accounts. Second highest no of respondents were having current account
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Table No. 5.7 Which of the following services you avail from the bank?
1. Credit 57
2. Banking 137
3. Loan 108
4. Business 56
5. Mutual Fund 23
108
100
Series1
50 57 56 Series2
23
0
Credit Banking Loan Business Mutual Fund
Interpretation:-
The researcher found that most of the respondents avail banking & loan services from the
banks. Out of 381, 137 respondents said that they used to go to banking mainly for
transactions like deposits & withdrawal while 108 respondent were availing facility of
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Table No. 5.8 Have you faced any banking fraud?
2. No 34 16.43
16.43
Yes
No
83.57
Interpretation:-
From the above graph it is clear that 83% respondent had faced the banking fraud. It
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Table No. 5.9- If yes, Then which Banking Sector?
1. Administration 19
3. Private 63
4. Retail 91
5. Others 02
Interpretation:-
As per the responses recorded from the respondents most of the banking fraud take place
in the co- operative banking sector their software & security systems would not be
effective to control or secure the data of banks. Another area for frauds was retail sector.
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Table No. 5.10- Which type of fraud have you faced?
Sr. No. Particular No. of Respondent
1. Forged or fraudulent Documents 11
2. Demand Draft fraud 09
3. Forgery and altered cheques 04
4. Stolen cheques 03
5. Accounting Fraud 24
6. Bill discounting fraud 01
7. Cheque kiting 26
8. Credit Card fraud 69
9. Debit Card fraud 111
10. Fraudulent loan Application 01
11. Phishing and Internet fraud/ Net banking 124
12. Money laundering 04
13. Forged currency notes 00
Interpretation:-
Researcher observed from the chart that most of the frauds are of two types debit card &
net banking fraud it could be because it easier to get that details of card or online banking
system.
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Table No. 5.11- Do you get proper assistance after recognition of fraud?
2. No 26 15.03
15.03
Yes
No
84.97
Interpretation:-
From the above graph it can be assumed that the 84.97% respondents responded
positively hence can be concluded as bank gives proper assistance to the fraud victims
when the account holder recognises that he met with the fraud.
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Table No. 5.12- How many times you faced fraud?
1. Once 21 12.14
2. Twice 69 39.88
12.14
47.98
Once
39.88 Twice
More than Three times
Interpretation:-
It is evident from above graph; almost 48% of the respondents had faced 3 times fraud
from the banks it could be because of bank or customer also. while 40% respondents
faced frauds twice while 12% faced frauds once in their life time.
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Table No. 5.13- If you faced the fraud then will you switched the bank?
1. Yes 43 24.86
2. No 69 39.88
chance
24.86
35.26 Yes
No
Will give another chance
39.88
Interpretation:-
It is evident from the above graph it was found that 40% of respondents won’t change the
bank as if they faced the fraud it could be because they have full faith on their bank &
also it could possible that they would have given proper attention & information about
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Table No. 5.14- How is your fraud incident is typically detected?
4. By accident 05 2.89
0 2.89
During account audit At the point of Through third party By accident
transactions notifications
Interpretation:-
From the above graph it was found that 64% respondents found there fraud at the point of
transactions. Also 19% respondents found there fraud during account audit.
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Table No. 5.15- What do you think is the biggest challenge to fraud Preventions?
percentage.
Interpretation:-
Researcher found that there were two biggest challenges to fraud prevention they were
lack of customer awareness & lack audit awareness. So Banks should provide proper
information to the customers & to the staff about the frauds & types of frauds and lack of
audit awareness.
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Table No. 5.16- What action you will take if you faced the fraud?
3. Do nothing 17 9.83
4. other 00 00
50 51.45
40 38.73
30
20
10 9.83
0 0
Police compliant Inform to bank Do nothing other
Interpretation:-
From the above graph it was found that most of the respondents had clicked the option of
inform to bank & police complaint whenever they will faced the bank fraud. This will
help the bank & the police to take proper action regarding the issue & also will help the
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Table No. 5.17- What precaution you followed after facing fraud?
50
40
30
51.45 Series1
20
29.48
10 19.08
0
2 step verification Strong Password Secured browsing
Interpretation:-
Researcher interpreted .that responded who have faced the fraud will put some strong
password to prevent the information which is required for net banking & also can have a
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Table No. 5.18- What security features you are expecting from bank?
24.86
Interpretation:-
As per the responses 39% respondent said that there should be software improvement
security system of banks & also 37% people said that there should also be training
program so that the people will know about the different types of fraud & how they can
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Table No. 5.19- How secure your online bank Portal is?
2. Secured 29 16.76
4. Insecure 95 51.91
50 51.91
40
30
26.59
20
16.76
10
0 1.73
Strongly secured Secured Not Sure Insecure
Interpretation:-
From the above graph it could be seen that almost 52% respondents thought that online
banking portal is not secure enough for doing the transactions. So the bank should
arrange training sessions to their customers so that they can have faith in their banking
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Table No. 5.20- Does your bank conduct fraud awareness campaign?
2. No 46 46.59
46.59
Yes
No
73.41
Interpretation:-
74% respondent said that their bank conducted fraud awareness campaign to help their
customers not to get affected from different types of frauds. These campaigns help the
customers to understand what are the different types frauds & hoe they can help
themselves and their friends & relatives not to get involve in those frauds & scams.
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Table No. 5.21- If yes, have you attended fraud awareness campaign?
1. Yes 89 70.08
2. No 38 35.51
127 100
35.51
Yes
No
70.08
Interpretation:-
The researcher found that 70% of the respondents had attended fraud awareness
campaign conducted by their banks to understand different types of fraud taking place
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Table No. 5.22- Do you think a bank is also responsible for fraud?
2. Agree 27 15.61
4. Disagree 34 19.65
40
30
20 35.6
10 20.81 15.61 19.65 Series1
8.67
0
Strongly Agree Neither Disagree Strongly
Agree Agree/ Nor disagree
disagree
Graph No. 5.22:- Respondent think bank also responsible for fraud in percentage.
Interpretation:-
From the graph the researcher found that neither the bank nor their customer was fully
responsible for the frauds. it could because both the banks & their customers have faith in
each other, Because one cannot blamed other for any kind fraud.
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Chapter 5:- Findings, Suggestions & Conclusion
Findings
Respondents avail banking & loan services from the banks. Out of 381, 137
respondents said that they used to go to banking mainly for transactions like
deposits & withdrawal while 108 respondent were availing facility of loan while
83% respondent had faced the banking fraud. It could be because of lack of
Most of the banking fraud take place in the co- operative banking sector their
software & security systems would not be effective to control or secure the data of
Most of the frauds are of two types debit card & net banking fraud it could be
proper assistance to the fraud victims when the account holder recognises that he
64% respondents found there fraud at the point of transactions. Also 19%
Two biggest challenges to fraud prevention they were lack of customer awareness
& lack audit awareness. So Banks should provide proper information to the
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customers & to the staff about the frauds & types of frauds and lack of audit
awareness.
Most of the respondents had clicked the option of inform to bank & police
complaint whenever they will faced the bank fraud. This will help the bank & the
police to take proper action regarding the issue & also will help the customer to
Responded who have faced the fraud will put some strong password to prevent
the information which is required for net banking & also can have a secured
As per the responses 39% respondent said that there should be software
improvement security system of banks & also 37% people said that there should
also be training program so that the people will know about the different types of
74% respondent said that their bank conducted fraud awareness campaign to help
their customers not to get affected from different types of frauds. These
campaigns help the customers to understand what are the different types frauds &
hoe they can help themselves and their friends & relatives not to get involve in
Neither the bank nor their customer was fully responsible for the frauds. it could
because both the banks & their customers have faith in each other, Because one
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SUGGESTIONS:
All the bank account holders should get proper knowledge about the frauds taking
Banks should provide proper required information to the customers time to time.
Conclusion
Most of the respondents avail banking & loan services from the banks. Most of the
respondents faced the frauds it as due to their lack of knowledge and their irresponsible
ways of handling bank account details. The bank account holders detect the frauds during
the point of transaction because they could have got the notification for the transaction by
the SMS alert of banks. There are various challenges faced by the bank account holders
and the banks some of them were lack of customer awareness & lack audit awareness. To
increase the awareness of the customers and the staff banks were taking efforts by
providing required training to the staff and information by SMS and Calls to the
customers.
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Bibliography
JOURNALS
2. An Investigation of Banking Cyber Frauds with Indian Private and Public Sector
management in Sonipat.)
March 2016) RBI Chair Professor Economics & Social Science Indian Institute of
Management Bangalore
ASSOCHAM.
WEBSITES
1) www.economictimes.com
2) www.businesstandard.com
3) www.wikipedia.com
4) www.rbi.gov.in
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Questionnaire
Name:- _______________________________________
Contact No:-___________________________________
1. Yes
2. No
3. What is your Occupation ?
1. Business
2. Service/ job
3. Housewife
4. Professionals
5. Student
6. Other
4. What is your monthly household income?
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6. Which of the following type of account do you have?
1. Saving Account
2. Current Account
3. Joint Account
4. Recurring Account
5. Other
7. Which of the following services you avail from the bank?
1. Credit
2. Banking
3. Loan
4. Business
5. Mutual fund
8. Have you faced any banking fraud?
1. Yes
2. No
9. If Yes then in which Banking Sector?
1. Administration
2. Co- operative
3. Private
4. Retail
5. Others
10. Which type of fraud have you faced?
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11. Do you get proper assistance after recognition of frauds?
1. Yes
2. No
1. Once
2. Twice
3. More than three times
4. Never
13. If you faced the fraud then will you switched the bank?
1. Yes
2. No
3. Will give another chance
14. How is your fraud incident typically detected?
1. Police Compliant
2. Inform to bank
3. Do nothing
4. Other
17. What precaution you followed after facing fraud?
1. 2 Step verification
2. Strong Password
3. Secured browsing
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18. What Security features you are expecting from bank?
1. Software Improvement
2. Experienced employed
3. Tanning Program
19. How secure your online bank Portal is?
1. Strongly secured
2. Secured
3. Not sure
4. Insecure
20. Does your bank conduct Fraud Awareness Campaign?
1. Yes
2. No
21. If Yes, have you attended fraud awareness campaign?
1. Yes
2. No
22. Do you think a bank is also responsible for Fraud?
1. Strongly agree
2. Agree
3. Neither Agree/ Nor disagree
4. Disagree
5. Strongly disagree
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