The document discusses bank frauds in India. It defines bank fraud and outlines some common types of offline and online bank frauds such as cheque fraud, payment card fraud, forgery, money laundering, and phishing. It provides tips for preventing fraud and recent examples of reported bank fraud cases in India totaling hundreds of crores. The conclusion states that fraud undermines trust in banks and the economy, so prevention through education and technology is important.

1. BANK FRAUDS
Submitted by: Submitted to:
Pooja Rani Dr. Bhavna Sharma
MBA 4th sem
Roll no. - 18022029

2. INTRODUCTION
BANKS ARE AN ESSENTIAL PART OF THE INDIAN ECONOMY.
WHILE THE PRIMARY RESPONSIBILITY FOR PREVENTING
FRAUDS LIES WITH BANKS THEMSELVES.
BANKS DEALING WITH PUBLIC’S MONEY DUE CARE AND
DILIGENCE.
THE RBI IS ADVISORY TO BANKS FOR PREVENTION OF
FRAUDS.

3. Definition of fraud
 Fraud can loosely be defined as “any behaviour which on person intends to
gain a dishonest advantage over another” under section 17 of the Indian
contract act,1872.
 RBI has defined the term “fraud” in its guidelines on
 frauds which reads as under-
“A deliberate act of omission or commission by any person, carried in the
course of a banking transaction or in the books of accounts maintained
manually or under computer system in banks, resulting into wrongful gain to
any person for a temporary period or otherwise, with or without any
monetary loss to the bank.”

4. What is bank fraud
 What is bank fraud ?
FRAUD means the crime of getting money by deceiving people that
is illegal or dishonest.
Bank fraud can be defined as an unethical and/or criminal act by an
individual or organization to illegally attempt to possess or receive
money from a bank or financial institution.
The reason of making fraud is to cheat the bank for financial
purpose .

5. Effects of fraud in banks
 Erodes public confidence in banking system.
 Diminishing the profitability of bank and thus reduces firm
value.
 Depletion of stakeholders and capital base
 Also, sometime threaten the going concern of the commercial
banks and forces a closedown
 Destroy the economy of the nation and its sovereignty.

7. Types of frauds
I. Frauds in offline mode.
II. Frauds in online mode.
I. Frauds in offline mode:
Cheque fraud.
Counterfeit securities.
Loan fraud.
Money laundering fraud.
Letters of credit etc.

8. Frauds in online mode
Sim cloning.
Phishing.
Duplicate website and application.
ATM skimmer.
Third party application.
Remote access.
Man in the middle attack.
Identity theft etc.

9. 1 : CHEQUE FRAUD :
most common cases of this kind of fraud are through stolen cheques and
forged cheques .
The sooner you report the lost or stolen check book the better. The bank
will usually reverse charges if you report the theft within 24 hours. ... Many
banks will allow you to check pending transactions and you may be able to
stop the transaction before it happens.
2 : 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.

10. 3 : Demand draft fraud :
Demand draft (DD) fraud typically involves one or more corrupt bank employees.
Firstly, such employees remove a few DD leaves or DD books from stock and
write them like a regular DD. Since they are insiders, they know the coding and
punching of a demand draft.
Such fraudulent demand drafts are usually drawn payable at a distant
city without debiting an account. The draft is cashed at the payable
branch. The fraud is discovered only when the bank's head office does
the branch-wise reconciliation, which normally take six months, by
which time the money is gone.

11. 4 : Payment card fraud :
Credit card fraud is a wide-ranging term for theft and fraud committed using or
involving a payment card, such as a credit card or debit card,
as a fraudulent source of funds in a transaction. The purpose may be to obtain
goods without paying, or to obtain unauthorized funds from an account.
5 : Forgery and altered cheques :
Fraudsters 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
cheques, simple altering can change $100.00 into $100,000.00
Instead of tampering with a real cheque, fraudsters may alternatively 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, etc. They
would subsequently cash the fraudulent cheque through another bank and
withdraw the money before the banks realize that the cheque was a fraud.

12. 6 : Money laundering :
Money laundering is the process by which large amounts of illegally obtained
money (from drug trafficking, terrorist activity or other serious crimes) is given the
appearance of having originated from a legitimate source.
7 : Phishing and Internet fraud :
Phishing, also known as Internet fraud, operates by sending forged e-mail,
impersonating an online bank, auction or payment site; the e-mail 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.

13. How can we prevent fraud?
Below are tips to help you protect your identity and data while
online :
General Tips:
Review financial statements for any suspicious activity.
Never give out financial information to unknown sources.
Never give out the three or four digit number on your credit card
to anyone claiming to be from a financial institution.
As a general rule, type the web site into the browser rather than
following links received in an email.

14. Safety Tips
 Check domain name and registry of websites.
Never share confidential information through call, SMS orany other media.
While entering PIN, passwords and CVV etc in the required field it should not be
shown in the field rather than it should be * marked.
Beware about skimming machine and hidden camera in the ATM room.
Do not share personal information on social media.
Never write passwords, PIN and other confidential information's in anywhere
especially in mobiles and PCs.
Check privacy and terms & conditions for things before doing.
We should use good and paid anti-virus on our PCs, tablets and mobiles etc.

15. Recent News of bank frauds
 Nearly 6,900 cases of online banking frauds were registered in the country in
2017-18, the Lok Sabha was informed on Tuesday.
Union Minister of State for Home G Kishan Reddy said with the rapid increase
in use of cyber space, the number of cyber crimes is also increasing.
"As per data maintained by the National Crime Records Bureau, 3,466 and
3,353 cases of online frauds were registered in 2017 and 2018.
 ED attaches Kolkata businessmen's assets worth Rs 10.5 crore in bank
fraud case
ED has attached assets worth Rs 10.5 crores in a bank fraud case. These
assets belong to Kolkata-based businessmen who defrauded banks using fake
identities and documents

16. Contd.
 Indians lost Rs 228 crore in 52,000 cases of bank fraud between Mar-Dec
2019: Govt
 Between fiscal years 2017 and 2020, a total of 140,471 cases of fraudulent
usage cases were reported, with the amount totalling Rs 589 crore
 Punjab & Sind Bank reports Rs 76 crore fraud by Saptarishi Hotels
 It is informed that non performing assets account namely Saptarishi
hotels pvt ltd.. With amount outstanding on the date of NPA that is April
30,2016 of Rs. 76.58 crore has been declared as fraud and reported to RBI
as per regulatory requirement

17. Conclusion
Bank frauds are done to make money by cheating the banks .
There are several loopholes in banking system that has been
used by fraudster. The numbers of bank frauds has been
increasing year on year along with that , RBI also engage in
making the banking system accurate and secured .
Frauds can have a potentially debilitating effect on confidence
in the banking system and may damage the integrity and
stability of the economy.

18. References
 www.google.com
 economictimes.indiatimes.com
 indiatoday.in
 tech.economictimes.indiatimes.com
 aninews.in