Author: 1 Sanjib Roy, LLM, ICFAI Law School, The ICFAI University, Dehradun
Co-Author: 2 Ashish Kumar Singhal, Associate Professor, The ICFAI University, Dehradun
ABSTRACT
The RBI Master Circular on Fraud stated that ‘frauds are committed by unscrupulous borrowers by various methods including a fraudulent discount of instruments, fraudulent disposal of pledged/ hypothecated stocks, funds diversion, criminal neglect and malafide managerial failure on the part of the borrowers. Globalization has brought banking facilities to all the countries and to all the people. The banking system receives money from society and at the same time circulates to society. If the banking system functions well and perfectly, the economic structure of that country functions well. The banks procure money from all sectors of the people, including the government agencies by way of savings, fixed deposits; at the same time the bank does not keep such procured money idle. Banks provide loans viz, housing, vehicle, educational to common man and loans to the government agencies, public undertakings etc.
The modern banking system has developed since 1990 along with the computer technology development in the urban and rural areas of every country. On the other hand, with the advancement of technology, financial frauds have reached a whole new range of deception and violation of privacy laws.
The Companies Act, 2013 plays a vital role in curbing financial fraud through Serious Fraud Investigation Office, The National Financial Regulatory Authority and Vigil mechanism here are legislations in place, but the enforcement needs to be bolstered. Because of poor financial literacy, there is a lack of information about financial products and their governance in small city / villages which leads to the growth of fraudulent transfers.
Keywords: Corporate, Digital banking, Fraud, Technology Development.
