Give civil servants cash, not LTC to avoid graft

The government claims to have unearthed a scam, involving Rs 2 crore or more, in how its employees and those of state-owned companies use their leave travel compensation (LTC). This is a component of their income, which may be claimed after travelling and producing the tickets for the journey undertaken. The reality, sleuths tracking the case have found, is different.  In some cases, the babus involved do not travel at all, but submit forged tickets to make their claim. In other cases, people choose bizarrely complex routes — Delhi to Jaipur via Brazil being not uncommon — to inflate bills and claims. In others, people travel cattle class, but are billed as flying business, with the excess funds used to travel overseas or more often.

Read more >> Click here

Public sector banks revise LTA norms in wake of scam

The government has revised norms governing leave travel allowance (LTA) forpublic sector banks in the aftermath of the leave travel concession (LTC) scandal.  Rajiv Takru, secretary department of financial services (DFS), told TOI that the department has issued revised norms for LTC for public sector banks. "We have told them what they can do and what they can't," Takru said.  
Sources said a former chairman-cum-managing director (CMD) of one of the PSU banks, who had claimed a trip from Jaipur to Delhi via Brazil using LTC facility, could still face serious action though he has returned the excess money he had claimed.  Over the past several months, TOI has exposed the LTC scandal, where employees of government and public sector units and banks, as well as some members of Parliament have either submitted forged or fake flight tickets to claim reimbursements. 

Read more >> Click here            ----  >>  Click here for - Punish all guilty - CVC tells Govt

As banks step up vigil, tech-related frauds slide

Technology-related banking frauds in India have fallen in the last four years, thanks to banks stepping up checks on online transactions. Between fiscal 2009 and 2013, they spent Rs 350 crore on manpower and machinery, and this is paying off. According to the Reserve Bank of India, the number of frauds has been going down since 2009. In FY13, 8,765 tech-related frauds were reported, a 13 per cent drop over the previous fiscal. “Investments to check tech frauds are being made on all fronts — technology, people and filters,” says Rajiv Rai, COO, Retail Banking at Deutsche Bank. The process is ongoing as banks have to keep pace with hackers and fraudsters who are refining their methods each day.

Read more >> Click here

Revise LTC norms, punish all guilty, CVC tells govt

The Central Vigilance Commission (CVC) has suggested to the government to revise rules and guidelines governing LTC/LTA (leave travel concession/allowance) in the wake of large-scale misuse of the facility.  TOI exposed the LTC scam in a series of reports starting August 22. The Central Bureau of Investigation (CBI) and the CVC are investigating the widespread misuse of LTC/LTA facility available to employees of the government, public sector units and public banks. According to sources, CVC Pradeep Kumar has written to the cabinet secretary and other senior secretaries of the government, suggesting immediate review of the rules and guidelines government the facility that provides flights tickets to employees and their family members to visit various parts of India.

Read more >> Click here

Scamsters drain out PF accounts with fake claims, EPFO swings into damage-control mode

Nearly 2.5 crore, or 30 per cent, of all provident fund accounts have a negative balance, some of which may be due to fraudsters who faked withdrawal claims to siphon off money by opening bank accounts using forged identity documents. The PF department, startled by these two separate findings made over the last few days, has swung into damage-control mode, issuing strict instructions to field offices to fix responsibility for these lapses, correct the spectre of negative balances and ensure that no fake claims get through the system. But the 8.15 crore formal sector employees with PF accounts should be worried, especially if they have switched multiple jobs in recent years but failed to withdraw or transfer the PF balances, or if an ex-employer has shut down in recent years.

Read more >> Click here

Fraud reporting is often a matter of perception

In a recent lecture, the RBI Deputy Governor, K. C. Chakraborty, said over 83 per cent of the cumulative losses of Rs 29,910 crore due to frauds occurred at public sector banks. The data given by the Deputy Governor also show that over 94 frauds involving a sum of over Rs 50 crore each were reported by nationalised banks, including SBI, in the 2009-10 to 2012-13 period.

Private sector banks, on the other hand, reported only six such cases and foreign banks, three. Chakraborty attributed this to deficient appraisal system, poor post disbursement supervision and inadequate follow-up. The implication is that private and foreign banks are far ahead in these aspects. The statistics have to be viewed in the context of the environment in which the banks operate.

The dividing line between delinquency in a loan account and frauds is very thin. The accounts which are viewed as delinquent by private sector banks are often viewed by public sector banks as frauds and reported as such. The state-run banks come under the purview of the Central Vigilance Commission (CVC) and the CBI , whereas private and foreign banks do not.

Read more >> Click here

Beware! Your KYC papers may be misused

Leaving your 'know your customer' (KYC) documents floating around can be dangerous for your financial well-being. Banks have discovered several cases of identity theft where fraudsters have created a new third-party identity using misappropriated KYC documents, such as copies of phone bills and PAN card, to avail of credit cards or loans.

Some weeks ago, a Mumbai resident found that his identity had been stolen and a fraudster had been using a credit card obtained by misappropriating his KYC documents. Besides this, there are several cases where identity theft attempts have been made, but have been nipped in the bud by banks using fraud detection software. 

Read more  >>  Click here

Fraud on banks, more by the rich, says RBI’s K. C. Chakrabarty

“When the times are good, the rich steal. When the times are bad, the poor people also steal. But this means rich people are stealing more,” said K. C. Chakrabarty, RBI Deputy Governor.

An analysis of the frauds reported in the banking system over the last two decade shows that the number of frauds had not gone up significantly, but the quantum has increased manifold. Loan-related frauds are a major concern for the central bank, Chakrabarty said.

The number of reported frauds in the banking system over the last 10 years was 1,76,547, and valued at Rs 31,400 crore, he added. In the last 25 years, a mere 61 fraud cases (involving Rs 50 crore or more in each case) accounted for a whopping Rs 13,000 crore, through 208 bank accounts.

Read more >> Click here

RBI ask banks to take preventive measures to avoid frauds

The Reserve Bank of India (RBI) has asked bankers to look at preventive measures that can be taken to avoid frauds, which has touched Rs 19000 crore for the banking sector.

At a meeting, held between RBI and CEOs of large commercial banks, RBI suggested that Indian Banks Association - the management body of commercial banks- to suggest a mechanism wherein a fraudster could be nailed and punished, said a bank chief who did not want to be named.

Read more >> Click here

Police to get training to deal with ponzi schemes

The RBI Staff College would train senior police officials to deal with cases associated with fraudulent money collection schemes, said D. Subbarao, RBI Governor.

Chairing a special Sate-Level Bankers’ Committee meeting here on Thursday, he said banks in Tamil Nadu should speed up opening of branches and bank accounts in remote areas of the State as infrastructure in Tamil Nadu was relatively better.

According to a press release from the Press Information Bureau, in the next two months, the State Government will identify 10 districts of where business correspondents can be trained, with the help of banks, in actual banking activities so as to facilitate financial inclusion.

Read more >> Click here

Basel panel moots stronger steps to curb money laundering

To  curb   money  laundering   and   terror    financing   activities,     the international   panel   on    banking    supervision    today came out with suggestions including stronger due diligence and clear policies by banks.

The suggestions of Basel Committee on Banking Supervision, whose members include India and the US, come amid governments worldwide making substantial efforts to tackle the menace of money laundering and terror funding.

Read more >> Click here

Fraudulent money transfer: Delhi High Court asks PNB to deposit Rs 45 lakh

The Delhi High Court has asked a nationalised bank to deposit with  it  Rs 45 lakh,  awarded      as   damage   in  an illegal fund transfer case, till the final disposal of its appeal.

The court stayed the Maharashtra adjudicating officer's February 25 order which asked Punjab National BankBSE -2.93 % (PNB) to pay Rs 45 lakh to Poona Auto Ancillaries as a fraudster transfered Rs 80.10 lakh from the PNB account of the MD of the Pune-based firm. 

Read more >> Click here 

Companies turn to insurers to cover cyber crime liability

With the rise in incidents of online data theft and cyber crime on the increase in India, corporates are not only taking efforts to tighten online security, but are also looking to take precautionary measures to prevent high liability caused by these incidents. Cyber liability insurance, hence, has been in demand.

“Cyber liability can be covered under our professional indemnity policy as an extension. Globally, as well as in India, we are seeing that information technology/information technology enabled service firms have an appetite for these policies,” said Gisha George, head-liability insurance, Bajaj Allianz General Insurance.

Read more >>Click here

Cobrapost finds some honourable bankers too

While online investigative magazine ‘Cobrapost.com’ found some branch officials of 30 banks and insurance companies willing to convert unaccounted money into legitimate money, it has also come across ethical bankers who are unwilling to cross the line.

In a special feature on ethical bankers, Cobrapost said, “Not all is dark and grim in the Indian banking sector.

“Out of hundreds of banking personnel whom Cobrapost reporters interacted with across the country, there are a few bank managers who stood out as redemptive icons of the Indian banking industry.

Read more >>Click here

29 Axis bank accounts hacked, Rs 13 lakh withdrawn from ATMs

A total of 29 Axis Bank accounts, including 12 operated by Mumbai policemen, have been hacked in the last two months and Rs 13 lakh withdrawn through ATMs inGreece, police said here today. 

Some of the policemen in the city had received SMS messages that cash has been withdrawn from their Axis bank accounts in euro currency, they said. 

Read more >>Click here

Cobrapost expose: RBI penalises Axis, HDFC, ICICI banks for rule violations

The Reserve Bank today imposed a fine of Rs 5 crore on Axis Bank, Rs 4.5 crore on HDFC BankBSE 0.07 % and Rs 1 crore on ICICI BankBSE -2.03 % for violation ofKYC norms and anti-money laundering guidelines after inquiring into charges levelled by a online portal Cobrapost.

"After considering the facts of each case ... Reserve Bank came to conclusion that some of the violations were substantiated and warranted imposition of monetary penalty..." the central bank said in a statement.

Read more >>Click here

Money laundering: Early action against banks violating norm, says RBI Governor D Subbarao

 Not absolutely ruling out money laundering, RBI plans to take early action against banks whose officials were recentlycaught on tape in a sting operation willing to indulge in serious violation of banking norms.

Leaving it to Parliament the issue of amending laws to provide heavier penalty on banks indulging in such acts, RBI Governor D Subbarao also dismissed perceptions that the central bank was going soft on errant banks. 

"What action? I cannot tell you because action on this has to be taken at lower level at the RBI. So it is premature to conclude that the RBI is going soft or harsh on this. 

Read more >>Click here

Cobrapost sting: I-T issues notices to ICICI, Axis, HDFC banks

 Income Tax department has issued notices to three top private lenders in the country - ICICI Bank, Axis BankBSE -0.52 % and HDFC BankBSE -0.22 % - in connection with alleged money launderingcharges levelled by online portal Cobrapost. The department has asked these banks to produce documents for verification as part of its tax evasion probe.

The notices have been issued under section 131 of the I-T Act (power regarding discovery, production of evidence) after going through two confidential reports submitted recently to the Department of Revenue by the RBI and the Financial Intelligence Unit (FIU), official sources said today.

Read more >>Click here

Clip discretionary powers of PSB chiefs to curb corruption, says CBI

After years of struggle to get autonomy in decision making, chiefs of state-run banks may lose chunk of their powers, as mounting non-performing loans bring their lending practices into sharp focus. 

The Central Bureau of Investigation (CBI), has suggested that the discretionary powers of chairman and executive directors should be revoked in order to curb corruption. 

In a report shared with the finance ministry recently, the CBI has pointed out that large borrowers can influence the top management of the banks in order to ease the loan-sanctioning process, a government official told ET. State-run banks, however, have opposed the proposal. 

Read more >>Click here

Fast-track court to deal chit fund fraud

Over 200 cases registered, investors' money may be returned in six months

Acting tough on fraudulent financial entities duping innocent investors, the Odisha government has decided to get these cases settled by a fast track court.

To expedite disposal of such cases, special prosecutors will be appointed.

"Cases of chit fund fraud will now be disposed off by a fast track court. The state government will enquire into alleged involvement of politicians, officials and journalists in the chit fund scam and whoever found guilty will  be punished. Properties of all fraudulent companies will be confiscated and depositors' money will be returned. We expect all this to happen in six months. The Bill passed by the state government to deal with cases of financial fraud is pending President's assent which we hope to get soon”, said finance minister Prasanna Acharya.

Read more >>Click here