Blood of Bank fraud victims are on these hands...
[P.S: This article is in continuation of my
previous article titled: Indian
Media is Insensitive..here where I had pointed out how
increasingly E banking frauds are affecting the health of
banking victims and why certain persons should be
considered responsible for the bloodbath ].
When an E banking fraud consumes a bank
victim, the first person who is responsible is the Chairperson
of the bank. If there is another CEO for the Bank, then both of
them should be held liable.
The reason is that the CEO of the Bank is the
person who is ultimately responsible for the loss of the victim.
The CEO is responsible for
a) The E banking system being insecure and
lends itself to E robberies very easily.
b) The Bank uses the system of password
authentication for Banking which is not authorized either by law
or practice since neither ITA 2008 nor RBI supports the password
system of authentication.
c) There is lack of risk management software
support to E banking (including lack of CCTV and physical
security in Banks and ATMs)
d)The KYC in beneficiary accounts have failed
e) His branch managers failed to pursue their
complaints with the Police
In a typical E Banking fraud a combination of
all these factors lead to the successful commission of the
I refer to the email from a customer of
Punjab National Bank referred to in my previous article which is
partially reproduced here for reference:
" My name is V..... M..... and I am a school teacher at S....
School in Thane. Two years bach rupees 10 lakhs were stolen from
our internet account. You can imagine what a shock it was. So
much that my husband had a heart attack and underwent a bypass a
month after the theft.
The robbers made 51 transactions in 4 days and transferred the
entire amount to seventeen different accounts.
We can observe here that 51 fraudulent
transactions were carried out and money was transferred to 17
different fraudulent accounts. It is most probable that all
these 17 accounts were also in Punjab National Bank itself in
In a similar incident in Chennai where two
customers of Punjab National Bank lost Rs 8 lakhs there were
about 20 fraudulent transactions. In another incident in Axis
Bank, Bangalore, 39 lakhs were siphoned off in about 14
different accounts half of which were in the same Bank. In
another incident in Noida, Rs 1.65 crores were transferred out
of a Punjab National account to about 7 fraudulent entries one
of which was a single massive withdrawal of Rs 81 lakhs. There
are other cases in ICICI Bank, SBI, HDFC Bank etc where the
number of fraudulent withdrawals were between 1 to 5.
I would like the Chairpersons of the Banks
some of whom have sat in the chairs of officers in the manual
banking era passing cheques to touch their hearts and tell me if
they would have passed these transactions if they had been in
the form of cheques without raising an alarm and making suitable
how do they allow laxity in processing of
similar transactions in e-form ?
Is it because they are ignorant of the E-form
of banking? Or
Is it because they consider it too expensive
to have a risk management software? or
Is it because the software supplier is not
capable of supplying?
Is it because they are not concerned with
"Safe Banking"? or
Is it because the loss is anyway being
hoisted in the customer and not the Bank?
I am aware that some of the CEOs or
Chairpersons who are heading the banks today might have never
sat in the officer's desk and hence may not understand the
importance of what I am implying and I want them to check with
their colleagues who have adequate experience about what is
"Negligence of a Paying Banker under Section 85 of Negotiable
Instruments Act"? and What is "Negligence of a Collecting banker
under section 131 of the Negotiable Instruments Act". They will
then realize if the cause of the E Banking frauds could be
attributed to "Negligence of the banker" (Whether it is the
Paying banker where the victim's accounts are maintained or the
Collecting Banker where the fraud beneficiaries maintained the
accounts and the laundering of the fraud money took place.
I would also like faculty members in Bank
training colleges to send a note on the points I have raised
above to their respective Chair persons. BTC should also send a
note on similar lines to the Governor and Deputy Governors of
RBI and to the Chairman of IBA.
This education of the Bank Chairpersons is
necessary because the current generation of Bankers donot seem
to be doing "Banking" but are conducting only an a E Commerce
business. This is not banking as per the definitions under which
RBI runs the country's Banking system and for which licenses
have been issued to banks. RBI is also failing in its duty to
recognize that "Internet Banking" is not being conducted as per
the guidelines issued by them where Internet is a channel for
"Banking" business and is bound by all the principles of
I therefore consider the Bank Chairpersons as
primarily responsible for the E Banking frauds and if any of
their customers have lost their life, Bank Chairpersons should
consider themselves guilty of causing these deaths.
I look forward to Chairpersons like Chanda
Kochchar of ICICI Bank, Kamat of PNB, Shikha Sharma of Axis Bank
and other Chairpersons to respond and convince me that they have
not been negligent in discharging their duties .
I want them to present to the public a list
of E Banking frauds that has occurred in their respective Banks
during their regime and find out if all their victim customers
are still alive.
I am sure that the list of fraud incidents in
each of these Banks will be long though I wish that none of the
customers are in their graves as of today.
I want the shareholders of these Banks to
raise this issue in the next AGM of these banks and ask them if
the shareholder is also a depositor, whether he should continue
to keep his savings in these banks.
(To be continued)
1. Indian Media is Insensitive..here
February 26, 2012