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Saturday, Feb 23, 2008
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Online edition of India's National Newspaper Saturday, Feb 23, 2008 ePaper | Mobile/PDA Version |
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Andhra Pradesh
Offenders can outwit bankers by procuring genuine documents through fraudulent means which are beyond detection, writes Marri Ramu Can bank frauds be controlled? It could be extremely difficult if the present banking transaction procedures are followed. That is how an engineer, accused of involvement in a bank loan fraud, asserted at an interactive meeting organised by the police recently in the city. Seasoned bankers attending the meeting were surprised when the engineer claimed that he could secure bank loans through fraudulent means and manage to get away. The bankers initially brushed aside his claims, but they realised soon how the banking procedures could be circumvented easily. Banks began tightening the process of verification of documents after cases of use of fabricated documents for availing loans came to light. As the fraudsters are always a step ahead of the bankers, they begin procuring genuine documents through fraudulent means which were beyond detection. Since address proof is sought to secure any certificate, the trickster makes his first move by renting a house and then a telephone connection. The telephone bill then becomes the basis for residence proof. Using this proof, a PAN card is obtained and it becomes a crucial document to prove his identity and address. By presenting them and paying a couple of thousand rupees, a fictitious company can be floated and registered. Using the ‘genuine’ registration documents of the fake company, the trickster then opens bank accounts in the name of employees. Where would one get photos to create identity cards of fake employees? Photos from the Net“Browse the database of any online marriage bureau or a middle-level company and download the pictures you like and use them to project as the workers,” is the simple solution narrated by the engineer at the meeting. All that one requires at this stage is a few lakh rupees to deposit towards salaries in the accounts of the employees to make the banker believe that the company is genuine.. Because of the fierce competition in sanctioning personal loans, banks invariably sanction loans to employees of the company, which, in fact, exists only on paper. The moment loan amounts are credited to the accounts, the ‘company’ owner can withdraw the money and simply vanish after vacating the rented office. Credit cards are also taken using this method and discarded after exhausting the credit limit. This modus operandi, interestingly, leaves no clue and hence the bank and police authorities find it extremely difficult to locate those cheating the banks. The police say, being outsiders, they can do little to prevent such offences. The scope to commit fraud in a financial system increases if safeguards and procedural checks are inadequate or are not followed strictly.
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