Thursday, October 15, 2015

Frauds in Banks

How bogus firms come into operation? How the banks are able to open several accounts without any suspicion.? Where is the KYC? What is the role of Concurrent auditors? The Bank generally will have an audit committee, Internal Inspection Machinery, statutory Inspection  and the system of submission of various returns to different Controlling offices and the Regulator? How the entire system has failed all these years is a mystery? These are all some questions lingering in the minds of  all stake holders of banks particularly depositors who are very badly hit for want of adequate return on their deposits,  inadequate and unsatisfactory customer service and harassment in the name of KYC to place their deposits in the banks.  The roots of this type of fruad would have gone very deep and  it requires really experts to fix the problem after getting an over all  modus operandi adopted to perpetrate such a major fraud. The indian banking system is becoming fragile of late thanks to laxity in supervision, non professionalism in management, and interference of the Government in its functioning. More skletons may be in the cup board as the branch wise inspection by the Regulator has been drastically cut short for obvious reasons. The Indra Dhanush proposals do not seem to address the internal deficiencies of banks which are killing themselves and all the stake holders of the economy. Banks deal with money and human resources and both are very sensitive to be handled. It requires a unique approach and the authorities have to be equally sensitive to manage both.

Dr T V Gopalakrishnan 

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