Banking Fraud and its Preventive and Detective Mechanism in Indian Perspective

Abstract

The banking Sector plays a very crucial role in economic development of any country. Since last few years Indian banking sector has witnessed very huge amount of frauds and this rapid increase in bank frauds become more problematic because it affects the public at large. The objective of this study is to analyze the trend of Indian banking sector frauds from FY 2017-18 to FY 2020-21 sector and operational area wise. Further an attempt is made to understand some fraud preventive and detective measures like Early Warning Signals, Red Flagged Accounts and proposed Forensic Accounting and Investigation Standards in current scenario. It is found that bank frauds reported from Indian public sector banks in FY 2020-21 is less as compared to FY 2019-20. Some key measures for prevention of bank frauds are also suggested at the end of the study.