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BANK FRAUDS IN INDIA: TRENDS, MODUS OPERANDI AND PREVENTIVE MEASURES

Paper Number :WP35/2024
Publication Date :March 1, 2024


Fraud detection and prevention is a national concern. Fraud prevention is important for the national economy's corporate image, and an efficient mechanism must exist to identify and stop the continuation of the frauds, as well as strict prosecution. This study investigates the nature and types of bank frauds, as well as their consequences, as well as bank perceptions of factors causing bank frauds, regulatory framework views, and fraud prevention mechanisms. Secondary data were collected from RBI’s website on Bank Frauds from 2004-05 to 2022-23 and correlation is calculated to understand the relationship among the bank fraud categories correlating with each other. Further, some bank managers were interviewed to understand the modus operandi of frauds and prevention mechanisms. A case study is analysed based on an interview which was done to gather the information about Nirav Modi case. This research also looks into the flaws in bank operational risk architecture. Based on the analysis and findings, it also intends to revisit the risk management architecture in banks and provide recommendations to prevent bank fraud incidents.