Higher risk of financial frauds: Banks need to be more watchful says the RBI

Category: International Finance Sub-category: International Banking
Document type: news

The Reserve Bank of India (RBI) has recently advised the banks to be more vigilant against transactions related to various money schemes, even the cheap funding programmes and lotteries as a means to safeguard people's interests from financial frauds which are gaining prominence day by day to our utter disappointment.

There has been a spate of fictitious offers of cheap funds in recent times from the fraudsters through letters, e-mails, mobile phones, SMS and so on, said RBI in a statement. It even went on to the extent of saying that targeted people have already been communicated on fake RBI letterheads, purportedly signed by its top executives/senior officials.

The fraudsters have been found seeking money from the gullible people, under different heads, such as, processing/transaction fees, tax clearance/conversion charges and clearing fees. It has also been observed that multiple accounts are being opened in the name of individuals or proprietary concerns, at different bank branches for collecting the transaction charges. The victims of the fraudsters have somehow been persuaded to deposit an amount with those accounts. And such amounts have been withdrawn immediately with no loss of time. Many residents who have been the victims of such cheatings lost huge money in the process.

The RBI therefore asked the banks to take proper caution and act more carefully while opening or allowing transactions in such accounts.

Moreover, it also clarifies that it is an illegal act on the part of any person residing in India to collect and remit such payments directly or indirectly outside the country. That way he/she will be committing a crime by violating the Foreign Exchange Management Act, 1999 and other rules under Anti Money Laundering (AML) standards.