BANK FRAUDS
These 10 transactions will be reported as fraud to RBI, as per new rules
The RBI said in a circular dated July 16, 2024, “These master directions have been prepared based on a comprehensive review of the earlier Master Directions, circular and emerging issues. These Master Directions are principle-based and strengthen the role of the Board in overall governance and oversight of fraud risk management in the Regulated Entities (REs).”
Noida bank branch falls victim to cyber attack: How hackers stole Rs 16.50 crore
A bank branch in Noida reported a server breach resulting in the illegal transfer of Rs 16.50 crore. Cybercriminals hacked the bank's RTGS system using stolen credentials. A special team is investigating the case. In a separate incident, Noida Police arrested a gang involved in various fraudulent activities across multiple states.
Fraud tag on loans only after hearing borrowers: RBI to banks
The RBI has mandated banks to give borrowers three weeks to respond before labeling accounts as fraudulent, aligning with a Supreme Court ruling on natural justice. Banks must issue detailed notices and consider responses before final classification, ensuring transparency. Boards must review fraud risk policies every three years, with a committee overseeing cases chaired by an independent director. Auditors are to investigate flagged accounts promptly, aiding in fraud detection. These measures aim to strengthen banking integrity and safeguard against financial misconduct.
RBI issues new circular, says lenders must hear loan defaulters before declaring accounts 'fraud'
The Reserve Bank of India has directed banks to provide defaulting borrowers with a minimum of 21 days to respond before classifying their accounts as "fraud." This follows a Supreme Court ruling mandating that banks cannot declare an account as fraudulent without issuing a show-cause notice and allowing the borrower a chance to respond.
ED arrests company promoter in Rs 25,000 cr bank loan fraud
The Enforcement Directorate has arrested the director of an automotive equipment manufacturing company in connection to a Rs 25,000-crore bank loan fraud case. Allegations of money laundering, cheating, and diversion of loans have been made. The case originated from a CBI FIR based on complaints from banks.
ST Corporation Scam: ED conducts search operations on ex-minister’s & MLA’s residences
The Enforcement Directorate (ED) conducted search operations on Wednesday in Karnataka, Telangana, and Andhra Pradesh, investigating the illegal transfer of Rs 89.63 crore of government funds to unknown individuals in Hyderabad. The scandal led to the resignation of B Nagendra, the state's tribal welfare and sports minister, as allegations emerged about the involvement of personnel from his office. The ED has taken the former minister's personal assistant into custody for questioning.
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What happens when your bank isn't really a bank and your money disappears?
The long-standing promise of bank insurance faces a crisis as online-only lenders with millions in deposits face turmoil, freezing customer accounts and leaving many in the dark about their money's fate. The complex web of blame, bankruptcy, and missing funds has left depositors struggling to recoup their life savings.
PNB introduces Safety Ring mechanism to enhance security for internet, mobile banking users
Punjab National Bank (PNB) launched 'Safety Ring' within internet and mobile banking to counter cyber frauds. This optional feature allows daily limit settings for term deposits (TDs) to be closed or used for overdrafts, reducing losses from unauthorized access. PNB stated this ensures transactions exceeding set limits are blocked through digital channels, enhancing security.
Don't leave your crease: ICICI Bank asks UPI users to follow cricket strategy to stay safe from frauds
ICICI Bank issued a warning about rising fake UPI payment scams, urging caution through social media. They shared a video advising users to verify unexpected UPI notifications carefully to avoid scams where scammers claim to have sent too much money and pressure victims to return excess amounts urgently. This alert coincides with a significant increase in digital payment fraud cases reported by the RBI. ICICI Bank encourages prompt reporting of cybercrimes and offers tips to protect against fraudulent transactions.
US cyber crimes: Overseas scammers are swiping billions from Americans every year, and getting away with it
Scammers are stealing billions from Americans yearly, exploiting technology and targeting older adults. Sophisticated fraud schemes overwhelm law enforcement and rarely lead to prosecution. With elder fraud complaints rising, experts call for coordinated efforts from private industries and the government to combat this escalating crime wave effectively.
Banks in a bind over Trai mandate on digital consent
Banks are grappling with new regulations from the Telecom Regulatory Authority of India (Trai) requiring digital consent for commercial communication. This has prompted lenders to seek government clarity on whether consent is needed for sharing transaction details, as per Reserve Bank of India guidelines. The move aims to combat cyber fraud, with banks also requesting special prefixes for customer calls following last month's finance ministry directive.
RBI Governor urges banks to step up efforts against ‘mule accounts’ & intensify customer awareness initiatives
RBI Governor Das emphasized the importance of managing third-party risks, enhancing compliance culture, and strengthening resilience in banks during a recent meeting with banking executives.
Hedge fund’s secret Adani short revealed in blow-by-blow account
A short-seller's report targeting Adani Group led to a $153 bn market value drop. The investigation involved a hedge fund, regulator, and a big Indian bank. US regulators scrutinized hedge fund collaborations and short-selling's impact on market efficiency.
Hedge fund’s secret Adani short revealed in blow-by-blow account
The short-selling scandal involving Hindenburg Research, Adani Group, and Sebi triggered regulatory scrutiny and a US Justice Department probe. The scandal emphasized the importance of market efficiency amidst fraud allegations and regulatory actions.
Hindenburg faces Sebi scrutiny, Kotak Bank dragged in Adani saga
Adani-Hindenburg Case: Hindenburg Research's disclosure of suspected violations by Sebi regarding Adani Group's short bet led to minimal gains, highlighting challenges foreign investors face under Indian securities rules. The short seller also stated that Kotak Mahindra Bank created and oversaw an offshore fund structure used by its "investor partner" to bet against the conglomerate, providing new details of trades that puzzled investors.
Banks scanning proprietor A/Cs to spot 'money mules'
Banks intensify scrutiny on new accounts to combat mule activities, adapting to evolving fraud tactics like forming private companies. Vigilant measures include verification visits, latitude data, and washout logic analysis to deter money laundering and digital frauds in the financial system.
Hunt on for mule bank accounts; Tata Digital pause on funding
The government is working with the central bank to catch mule accounts in India’s banking system and prevent fraud. This and more in today’s ETtech Morning Dispatch.
Beware... 800 online financial frauds a day
Furthermore, if all the cases from the National Cyber Crime Reporting Portal are included, the surge is even higher. Many frauds reported on the portal are not recorded as banking frauds because the money is transferred voluntarily to a third party masquerading as a merchant or service provider.
FIU imposes over Rs 1.66 crore fine on Axis Bank for failing to detect fraud NSG account
The Financial Intelligence Unit has fined Axis Bank over Rs 1.66 crore for failure to detect and report suspicious transactions involving a fraudulent account created in the name of the NSG counter-terrorist force. The agency's order under the PMLA found Axis Bank employees complicit in a large-scale fraud. The bank was directed to review its monitoring mechanisms, improve data-sharing practices, and implement stringent employee screening and training programs.
M2P fintech teams up with Bureau for enhanced fraud prevention
The number of frauds detected in the banking system last fiscal almost tripled on year, according to the central banks’ annual report with the RBI governor highlighting the need for a system wide approach to mitigate such frauds.
RBI's proposed digital payments intelligence platform will mitigate frauds, say experts
The Reserve Bank's proposal to establish a digital payments intelligence platform aims to combat fraud and enhance consumer trust. A committee led by A P Hota will assess the creation of this platform, leveraging advanced technologies to mitigate payment fraud risks.
RBI sets up panel to track online payment frauds; AP Hota to head committee
Along with Hota, representatives of NPCI, State Bank of India, HDFC Bank and ICICI Bank have been made members of the committee. The platform will establish operational guidelines for the proposed processes, determining the extent of data to be provided by reporting entities such as banks and fintechs. The committee will be responsible for defining these guidelines.
IBA chief explains what bank frauds really are, stresses on critical 'golden hour'
As per the RBI's recent annual report, fraud cases surged to 36,075 in FY24, marking a significant rise from 13,564 reported in the previous fiscal year. The report highlighted that a majority of these frauds, in terms of volume, were related to digital payments, including card and internet transactions.
Banking frauds triple in the past fiscal year: RBI data
The amount involved due to fraud in public banks was Rs. 10,507 crores, while private banks incurred losses of Rs. 3,107 crores. The number of frauds due to card and internet transactions shot up more than four times, with 29,000 cases being detected in FY24.
Bank frauds up nearly 300% in last two years, digital frauds up 708%: RBI
Fraud cases in Indian banks surged to 36,075 in FY24 from 9,046 in FY22, a nearly 300% increase, while the amount involved dropped by 46.7% to Rs 13,930 crore. Most frauds occurred in digital payments, but the highest value frauds were in loan portfolios, with public banks contributing the most by value.
Greater transparency: No indemnity clause in NPA sale pact between banks and ARCs
High-street banks and stressed asset firms in Mumbai adopted a 'model agreement' for selling loans but couldn't agree on 'indemnity'. Lenders can declare an account 'fraud' post-sale to ARCs. The industry body approved the Model Assignment Agreement and Model Trust Deed for adoption by banks, financial institutions, finance companies, and ARCs.
DHFL scam: After CBI arrest, Dheeraj Wadhawan sent to judicial custody for Rs 34,000-crore bank fraud case
Former DHFL director Dheeraj Wadhawan was arrested by the CBI in connection with a Rs 34,000-crore bank fraud case. He was charge-sheeted in 2022, produced before a special court in Delhi, and sent to judicial custody. Wadhawan was earlier arrested in the Yes Bank corruption case and is linked to the biggest banking loan fraud in India.
Banks may challenge CBI's retro touch to fraud accounts
Last year, the highest court had ruled that a borrower must be given a hearing before labelling the account as 'fraud'. Now, CBI, which is probing many of these cases, insist that the SC verdict stands for all fraud accounts - new as well as old cases - but banks assert that the SC ruling cannot be given 'retrospective' effect to cover borrowers listed as frauds before the ruling.
RBI plans curbs on suspect bank accounts to fight cyber fraud
RBI plans to amend guidelines allowing banks to temporarily freeze accounts suspected of cyber crimes, combating a surge in online fraud. Victims currently face delays in freezing accounts, hindering recovery. The Reserve Bank of India aims to empower banks to suspend accounts linked to cybercrime without requiring police reports first.
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