State Bank of India is the largest Bank in India and in certain respects is a
global size Bank. There are millions of customers in India and abroad and next
to RBI, it is the Bank for most Indian Government transactions.
Can such a Bank fail?.. If so what could be the consequences on the
public?..On the Economy?.. The thought itself sends a chill down the spine.
Obviously no Indian would like to believe that SBI can fail. But imagine.. if
SBI can be brought down, it would be the biggest financial invasion that any
global financial institution can ever dream of. Even if the trusted foundation
of the Bank can be shaken, it would amount to a big victory for the anti India
forces. It is therefore reasonable to think that there could be many forces
interested in the fall of SBI.
Are they at work?..is a thought that passes my mind....Why such diabolic
thought?...Why bring it up to public now?...Here are some reasons.
During an examination of a casual complaint from one of the customers of State
Bank of India in a branch in Bangalore, it came to my notice that there were
several unexplained anomalies in the accounting of fixed deposit accounts in the
branch. The problem was inherent in the computerised system and I presume it
would be manifest in several other Branches of the Bank.
I understand that the software responsible for the problem is sourced from an
Australian Company and customized by TCS.
The anomalies described in greater detail in the following article indicate
a) Customers are getting less interest than they should get as per contract
b) The amount of interest debited to the Interest payable account does not tally
with the amount credited to the customer's SB account
c) The amount of interest paid to the customer does not tally with the amount of
interest credited internally to the interest payable account leading to the
payment of interest from the capital account of the fixed deposit in violation
of RBI guidelines.
d) There is an indication of existence of huge unreconciled amount within the
branch which has not perhaps been adequately handled by the auditors.
e) The Branch staff is unable to fathom the essence of the problem since the
account is managed from the central server in Mumbai.
f) The staff appear to be inadequately trained to handle exceptional situations
and software bugs.
g) Neither the vigilance department nor the customer relation department of the
bank has taken the problem seriously for rectification
h) The software vendor has not shown any interest in sorting out the mess though
there is a clear indication of a software bug. (Probably the matter has not been
brought to their notice)
i) The problem is not restricted to a single case and according to information
available there are nearly 60 accounts in the branch in which the problem has
j) The anomaly in one respect is in the range of 16 % of the interest
amount involved which indicates an alarming position.
It would be necessary for State Bank of India to immediately put together a team
of experts to investigate the matter and understand the depth of the problem or
if it indicates a fraud or a massive software related mess. If there is a
possibility of a fraud or a software bug the impact can be huge enough to even
melt down the solid foundation that SBI has built both in terms of physical
assets as well as in the form of the Trust which it has with the Indian public.
It is also necessary for RBI to immediately take action in expediting the
investigation process. Even TCS needs to set up a team to investigate if the
software has any bug.
We are all aware how Salami attacks are built into software and one cannot rule
out the possibility of a fraud of similar nature.
More details will follow in the next piece of article.