Who is trying to hide Cyber Fraud scam in Indian Banks?

It has been pointed out that the answer given by the Government on the status of Bank frauds in India does not appear to contain correct information. It was pointed out that the figure of frauds for 2009 quoted in the February 22,2013 press release places the frauds at Rs 4048.94 lakhs where as for the same period, reply given to a Parliamentary question on 30.7.2010 stated the fraud value as Rs 16.69 crores.

At the same time we also pointed out that an RTI reply from RBI to DNA Mumbai had placed the frauds in 2006-2011 to be of the order of around Rs 4500 crores just in the top 5 cities of India with Mumbai alone accounting for Rs 1882 crores.

Today a report in TOI  reiterates that Cyber Frauds are around Rs 130 crores in three years based on the PIB release.

It is also known that RBI has earlier been stating that the Fraud reports that it obtains from Banks donot cyber frauds separately. However the PIB press release of 22nd February clearly points out that the figure is for Cyber Frauds. It is not clear how RBI was suddenly able to get these figures.

Also according to the Fraud guidelines all frauds reported in Banks should be reported to the Police by the Banks. According to the PIB release there were 8322 cyber fraud cases in 2012 alone. In 2011 and 2010, the number of frauds were 9588 and 15018 respectively. This means that a total of 32,928 Cyber fraud complaints should have been registered all over India by Banks. These should have reflected as “Cyber Crimes” int he NCRB statistics.

However, NCRB statistics donot show these numbers.

From these various observations it is clear that either the Government is trying to mislead the Parliament and the public about the real status of Cyber fraud incidence in Banks or neither the Government nor RBI is even aware of the actual position.

If RBI and the Government donot know the actual fraud situation, then they it reflects a gross incompetence. If they are aware and are misleading the public, we need to investigate why they are concealing the facts and whether there is any attempt to hide a scam in the Banking industry.

The industry observers estimated the extent of Cyber Frauds in Indian Banks to be way above the figures quoted in the recent reports. The belief is that the frauds are in the region of Rs 6500-8000 crores per annum as against Rs 50 crores now being talked about.

There is therefore a prima facie evidence that there is some thing fishy about the PIB release. There is an apparent motive to suppress the Cyber Fraud situation with vested interests who are promoting disincentivisation of cheques and it is possible that the same people are behind this misinformation.

There needs to be some investigation and a clarification in the Parliament. I wish some MPs such as Rajeev Chandrashekar should take up this matter and seek the clarification from the Finance Ministry.


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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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