Banks seeing rise in incidents of fraud: Deloitte

“Banks have witnessed a rise in the number of fraud incidents in the last one year,” says the survey titled ‘India Banking Fraud Survey 2012’

Domestic banks have witnessed a rise in the number of frauds in the past one year and expect the trend to continue in the near future, a survey titled ‘India Banking Fraud Survey 2012’ by Deloitte India says. The survey, which covers most public, private sector and foreign lenders along with co-operative banks, also says fraud risks may increase with weakening economic environment.

No bank, whether private, public or MNC, is immune to frauds. As economic conditions continue to soften, it can lead to increased fraud risks. While as many as 93% of the respondents indicated that there has been an increase in frauds, at least 75% said the increase was at least 5% more than the last year. The survey also points out that retail banking will be the most vulnerable to frauds, followed by corporate banking.

“While retail banking is the most vulnerable segment... priority sector lending followed by corporate banking are other two segments in which frauds are likely to happen,” Deloitte Touche Tohmatsu India, senior director, Neeta S Potnis said, adding that as the asset size of a bank increases, it sees higher incidence of frauds.

According to the survey, lack of oversight by the senior managers has been one of the major reasons for frauds. Also, “difficult business scenario” and “business pressure” are the other contributing factors. Types of fraudulent incidents which appear to rank high are retail, corporate and priority sector in the public sector banks, and identity theft along with misuse of power of attorney in private sector banking.

As per the Reserve Bank of India (RBI), the number of fraud cases increased to 24,797 in 2009-10 from 21,247 in 2007-08. Recovery in the case of a fraud is less than 25%, according to over half the respondents, “indicating that banks are not able to recover losses in case of frauds,” the survey says. About the preparedness of the banks to prevent frauds, the survey says it is still a work in progress in many organisations.



Nagesh Kini FCA

5 years ago

Banks venturing into non-core operations like selling insurance and Mutual fund products gives the banks little time to concentrate on in-house checks and balances. Bankers have turned sales persons going from door to door canvassing bank assurance and other non-banking products instead of dealing with prevention and detection of frauds.
I write this as a RBI empaneled statutory auditor of bank for long.

prashant n

5 years ago

Is it true that weakening economic environment increases the frauds in an economy?
Or is just another myth, which is handed down from generation to generation?

I see it this way, a weakening economic environment, reduces the resources channeled towards fraud prevention measures, which encourage folks to take chances at frauds.

ONGC Q3 net dips 5% due to high subsidy bill

ONGC reported a net profit of Rs6,741.41 crore in the October-December 2011 quarter

State-owned explorer Oil and Natural Gas Corporation (ONGC) reported a 5% drop in its net profit in the quarter ended 31 December 2011, as a sharp rise in fuel subsidy output offset one-time gains it made from Cairn India's Rajasthan oilfields.

ONGC reported a net profit of Rs6,741.41 crore in the October-December quarter as opposed to Rs7,083.23 crore a year ago, the company said in filing to the stock exchanges.

The state-owned firm said the royalty it pays, not just on its 30% stake but also 70% interest of Cairn India on crude oil produced from the Rajasthan block, is now being treated as cost recoverable.

“As a result, an income of Rs3,142 crore received from Cairn India towards royalty paid for the period August 2009 to September 2011 has been disclosed as an exceptional item,” ONGC said. Further, for the period October to December 2011, an amount of Rs627 crore has been accounted as receivable.

ONGC said its board of directors has declared an interim dividend of Rs6.25 per share (125%) amounting to Rs5,347.18 crore

In the early afternoon, ONGC was trading at around Rs275.95 per share on the Bombay Stock Exchange, 2.47% down from the previous close.


Tech Mahindra Q3 Revenue up 19% YoY at Rs1,445 crore

Tech Mahindra’s Q3 profit after tax was up 14.8% q-o-q at Rs276 crore

Tech Mahindra, India’s fifth largest software exporter announced audited consolidated financial results for the third quarter ended 31 December 2011. Revenues were up 8.4% q-o-q (quarter on quarter) at Rs1,445 crore. This translates to y-o-y (year on year) growth of 19% in revenues. Operating profit (EBITDA) was up 14.7% q-o-q at Rs234 crore. Profit after tax was up 14.8% q-o-q at Rs276 crore. Earnings per share (EPS) were Rs21.8 for the quarter.

Total headcount was at 42,746. The software professional headcount stood at 25,218; BPO at 16,419; and support staff at 1,109. Debt was Rs1,376 crore as of 31 December 2011. Cash and cash equivalent stood at Rs321 crore on the balance sheet as of 31 December 2011.

Vineet Nayyar, vice chairman, MD and CEO of Tech Mahindra said, “We have had a satisfactory quarter, with growth in both revenue and margins. This is a result of our investments in growth markets, and in emerging technologies. We continue to focus on delivering enhanced value to our customers in an uncertain economic environment.”

In the early afternoon, Tech Mahindra was trading at around Rs656.25 per share on the Bombay Stock Exchange, 0.85% up from the previous close.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)