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An Investigation Types and Reasons of Frauds in Indian Public Sector Banks
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| Author:
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MS.BHAVNA SHARMA, SULTAN SINGH, D. BABIN DHAS
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| Abstract:
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Fraud is a challenge to the world and particularly for banking sector, a significant segment in the advancement of an economy. The frauds may be done by the management, employees, customers and outsiders, which considerably reduce the amount of funds in the banks and cause losses to the banks and also affect the economic development. The purpose of the study is to find the various categories of frauds occurred and reasons thereof in the selected Indian public sector banks. The data were collected through questionnaire filled from 90 bank staff, categorized into managers and officers, of State Bank of India (SBI), Bank of India (BOI) and Bank of Baroda (BOB) in the area of Delhi and NCR. The collected data were analyzed with the help of various descriptive statistics like frequency distribution, mean, standard deviation, etc. To check the validity of the results and test the hypotheses, ANOVA technique was used. It is found that major types of frauds occurred were fake documents, forged cheques, money laundering, manipulation of accounts, opening fictitious accounts. The main reasons of frauds identified were lack of sufficient training to staff, lack of proper audit, multiple financing to same party against same security, negligence to inspect the security documents and non-verification of end use of funds. It is recommended that bank staff must check proper financial documents during the loan process to control the frauds. All high-risk transactions should be checked on continuous basis by the bank head and also by the concurrent auditor. There should be timely audit at regular intervals and proper discussion of audit points with the branches and top management. Proper training must be provided to the bank staff involved in prevention and detection of frauds. End use of funds must be verified by the bank staff regularly.
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| Keyword:
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Frauds, Negligence, Money laundering, Manipulation of Accounts, Fake documents.
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| EOI:
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-
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| DOI:
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https://doi.org/10.31838/ijpr/2020.SP2.124
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| Download:
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