Reasons For Bank Frauds And The Implementation Of Preventive Security Controls In Indian Banking Industry

Aratrika Ghosh, Symbiosis Law School Nagpur

ABSTRACT

Criminal acts or dishonest business practises that aim to steal money or other assets from a bank or its clients are known as bank frauds. These scams can take many different shapes and have a range of victims, including people, companies, and financial institutions. Identity theft is one type of bank fraud that is frequently committed, in which a fraudster steals personal information from a victim's bank account, such as their social security number or account information. After then, they might carry out illegal actions or start fresh accounts in the victim's name. The next type of fraud is credit card fraud, followed by check fraud, in which criminals alter or fake checks to make them payable to themselves, which can result in unauthorised withdrawals from a victim's account; An account takeover, in which a criminal accesses a victim's online banking login information and seizes control of their account, resulting in fraudulent transactions, fund transfers, or identity theft. Then comes loan fraud, which is the practise of sending phoney emails or messages that look to be from a reputable bank. It is possible for people or companies to submit loan applications using incorrect information, such as overstated assets or income. Next is insider fraud. Some bank frauds are carried out by bank personnel who abuse their access to the bank's systems or customer information for selfish purposes. The next issue is mobile banking fraud, which is quite frequent and common. In order to hack mobile devices or fool users into performing fraudulent transactions, fraudsters may employ a variety of strategies as mobile banking and payment apps grow more widespread. Then there is the age-old practise of money laundering, in which criminals utilise banks to disguise the origin of monies coming from illegitimate sources and conceal money gained through illegal activity. Banks use a different kinds and types of security measures, including encryption, multi-factor authentication, fraud detection systems, and transaction monitoring for unusual activity, to stop and handle bank fraud. Additionally, clients are urged to exercise caution, protect their personal data, and alert their bank to any questionable behaviour. Bank fraud cases are investigated and prosecuted with the help of legal authorities and financial regulators.