While the banking system in India witnesses a steady growth in total business and profits, the amount involved in bank frauds is on the rise. This is a matter of concern for bank management and Reserve Bank of India. These bank frauds seem to be innovative in terms of modus of operandi and are pretty huge by size. This unhealthy development in the banking system produces not only loss to banks but also affects their credibility adversely. Hence, it calls for a study of nature and extent of bank frauds, their modus of operandi, institutional arrangements for conducting investigation and preventive strategies. For such study, it is necessary to collect the relevant data relating to bank frauds, examine policy guidelines of Reserve Bank of India and progress made in preventing frauds. The present paper is based on comprehensive analysis of bank frauds in India and examines emerging challenges before the banking system.
Bank fraud, modus of operandi, KYC norms, Anti- Money Laundering Act, Chief Vigilance Commissioner
