A PROJECT

ON

BANK FRAUD

[Submitted as partial requirements for B.A.LL.B. (Hons.) 5 Year

Integrated Course]

Submitted On:

7th january 2023

Submitted By: - Sneha Halduniya

Submitted To: Mrs pooja Saxena

Roll No: 98

Faculty: The law of contract

Semester : 3rd -B

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 DECLARATION

I, Sneha halduniya hereby declare that this project titled “ bank

fraud” is based on the original research work carried out by me under
the guidance and supervision of Mrs pooja saxena mam

The interpretations put forth are based on my reading and

understanding of original texts. The books, articles, websites etc.
which have been relied upon by me have been duly acknowledged at
the respective places in the text.

For the present project which I am submitting to the university, no

degree or diploma has been conferred on me before, either in this or
any other university.

Date: 7th January 2023

Sneha halduniya
3rd semester
98

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 ACKNOWLEDGEMENT

In the accomplishment of this project successfully, many people

have best owned upon me their blessings and heart pledged support,
this time I am utilising to thank all people concerned with this
project.

First of all I would like to thank our Director Dr. Auruna Chodhary
for giving me an opportunity. I would like to thank our supervisor
Mrs mam whose valuable guidance and suggestions helped me
complete this project within time.

I would like to thank librarian and library staff that have been great
support throughout.

Last but not the least, I would like to thank my parents and friends
for their valuable suggestions which helped me in completing this
project successfully.

Sneha Halduniya

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 CERTIFICATE

Pooja Saxena
Date : 7th January 2023

Faculty: University Five Year Law College

University Of Rajasthan, Jaipur

This is to certify that Miss Sneha halduniya of 3 Semester, Section B

of University Five Year Law College, University Of Rajasthan,
Jaipur has carried out the project entitled “ bank fraud” under my
supervision and guidance. It is an investigation report of a minor
project. The student has completed research work in my stipulated
time and according to norms prescribed for the purpose.

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 TABLE OF CONTENT

1) RESEARCH METHODOLGY-----------------------------------6
2) INTRODUCTION--------------------------------------------------7
3) BANK FRAUDS---------------------------------------------------8
4) CONCLUSION----------------------------------------------------10
5) BIBLIOGRAPHY-------------------------------------------------11

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 RESEARCH METHODOLOGY

The researcher has adopted doctrinal method research. The

researcher has made extensive use of available resources at the
library of university five year law college and internet resources.

RESEARCH QUESTIONS

1) What are banking frauds?

2) Under which section frauds are punishable offence?

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 INTRODUCTION

Indian banking sector has experienced significant growth and changes since
liberalization of economy in 1991. Though the banking industry is generally
well regulated and supervised, the sector suffers from its own set of
challenges when it comes to ethical practices, financial distress and
corporate governance.
Fraud means
(1) A knowing The misrepresentation of the truth or concealment of a
material fact to induce another to act to his or her detriment. Fraud is usually
a tort, but in some cases (especially when the conduct is wilful) it may be a
crime.
(2) A misrepresentation made recklessly without belief in its truth to induce
another person to act.
(3) A tort arising from a knowing misrepresentation, concealment of
material fact, or reckless misrepresentation made to induce another to act to
his or her detriment.
(4) Unconscionable dealing; esp., in contract law, the unconscientious use of
the power arising out of the parties’ relative positions and resulting in an
unconscionable bargain.”

1
4. https://www.acfe.com/fraud-101.aspx

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 BANK FRAUDS

Colloquially, the terms “fraud” and “scam” are used interchangeably to refer
to any kind of financial wrongdoing. Legally speaking, fraud usually refers
to a broader and more serious crime, with scams representing one type of
fraud. A scam is a fraudulent scheme generally involving money and some
sort of business transaction
Fraud implies a deception. It is a breach of confidence or trust. Fraud is a
serious crime and a violation of civil law. The motivations for fraud can be
many. These include monetary gain, discrediting an opponent or adversary.
It can be to gain prestige as well as a financial advantage.
Fraud as Defined In Section 17 of Indian Contract Act, 1872 “Fraud” means
and includes any of the following acts committed by a party to a contract, or
with his connivance, or by his agent, with intent to deceive another party
thereto or his agent, or to induce him to enter into the contract:
1. the suggestion, as a fact, of that which is not true, by one who does not
believe it to be true;
2. the active concealment of a fact by one having knowledge or belief of the
fact; 3. a promise made without any intention of performing it;
4. any other act fitted to deceive;
5. any such act or omission as the law specially declares to be fraudulent.
In order to amount to Fraud, an act must be confined to acts committed by a
party to contract with an intention to deceive another party or his agent or to
induce him to enter into a contact. Fraud, which vitiates the contract, must
have a nexus with the acts of the parties entering into the contract. This
definition highlights the precondition to prove the intention of the person
who has committed Fraud. If that person has willingly committed a Fraud,
then he will be punished. Here the person means himself or his agent. The

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acts which include fraud are wrong suggestions or concealment of facts or
false promises or any fraudulent act to deceive others.
Fraud under the Companies Act, 2013 The Companies Act, 2013 focuses on
the issues related to corporate Fraud, as is visible, it may continue in the
future too. As per Section 447, Fraud in relation to affairs of a company or a
body corporate, includes any act, omission, concealment of any fact or abuse
of position committed by any person or any other person with the
connivance in any manner, with intent to deceive, to gain undue advantage
from, or to injure the interests of, the company or its shareholders or its
creditors or any other person, whether or not there is any wrongful gain or
wrongful loss;
1)“wrongful gain” means the gain by unlawful means of property to
which the person gaining is not legally entitled;
2) “wrongful loss” means the loss by unlawful means of property to
which the person losing is legally entitled2

2
https://tejas.iimb.ac.in/articles/Banking%20Frauds_

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 CONCLUSION

The frauds may be primarily due to lack of adequate supervision of top

management, faulty incentive mechanism in place for employees; collusion
between the staff, corporate borrowers and third party agencies; weak
regulatory system; lack of appropriate tools and technologies in place to
detect early warning signals of a fraud; lack of awareness of bank employees
and customers; and lack of coordination among different banks across India
and abroad. The delays in legal procedures for reporting, and various
loopholes in system have been considered some of the major reasons of
frauds and NPAs. Measures such as strengthening of regulatory and
supervisory framework of banks and financial institutions in line with global
best practices and updated technology for efficient customer services and
effective fraud detection can help in reduction of frauds in banking sector.

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 BIBLIOGRAPHY

1) https://www.acfe.com/fraud-101.aspx
2) https://www.bankingfinance.in/bank-frauds-in-india-ananalysis.html

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