Bank Frauds and misuse of information

Bank fraud is to make money by dishonest act. Fraud involves misrepresentation, breach of trust, manipulation of books of accounts, enhancement of stolen cheques, managers cheques and bills of exchanges, wonderful handling of securities pledged to bank, embezzlement, theft, misappropriation of funds, cheating, shortages in hypothecated stocks, irregularities, conversion of properties etc. Each bank can face this situation in one form or the other at times so it has to strengthen its internal audit system for an early detection and prevention of the same.

Person involved in fraud can be categorized in three groups. They are bank employees acting alone or with other colleagues, bank employees in collusion with outsiders and outsiders having knowledge about the loopholes in the operation procedures and information technology. Banks experiences frauds committed by the former two categories more in number than by the outsiders. For prevention of all sorts of fraud, bank offer their employees handsome salaries and attractive facilities in both financial and non financial terms. Banks employee who intends to be rich overnight by any means and those who lice an extravagant life commit fraud, despite having a good status in the society.

Banks face fraud due to many internal weaknesses of its own. 

When the internal control system is weak banks become vulnerable to frauds from the unscrupulous staff. Dilution of efficiency in managerial staff or their involvement also becomes a prominent cause for fraud to take place from lower level's staff. Banking industry was shocked when the directors and chairman himself was involved in some embezzlement of the bank fraud takes place through the act of unscrupulous customers also. They hypothecate the same goods in multiple of banks without informing the former bank and divert the fund in various purposes, pledge instruments handed over in good faith, some customers have been found to pledge some instrument in some other bank and avail funds. Stewards have been found to forge their proprietor's signature and withdrawn heavy amount and absconded. 

In this world of information technology, fraudulent people from various parts of the world having a high IT knowledge have transferred heavy amount in their account, maintained in various countries by detecting the passwords of the customers. Lost of credit card or stolen of card are found to be most vulnerable, if the payment is not stopped immediately as the magnetic strip at its back contains all the data required, Which can be used as freely as cash. Hence in this modern world the banks with all its sophistication frauds take place more in number than ever. This is the message to all financial institution to be protected and safe from probable fraud in the coming future.