The Indian Penal Code (IPC) doesn't o er a single, overarching de nition of fraud.

Instead, it
outlines various o ences that constitute fraudulent behavior in di erent scenarios. To ensure
standardized reporting, the Reserve Bank of India (RBI) has categorized frauds based on the IPC
sections most applicable to them. Let's delve deeper into these classi cations:
1. Misappropriation and Criminal Breach of Trust: This category deals with situations where
someone entrusted with property, like a trustee or a person with power of attorney,
dishonestly diverts it for their own bene t. This could involve pawning or selling the entrusted
property without permission or using it for unauthorized purposes. Relevant IPC sections here
include Section 405 (criminal breach of trust) and Section 406 (punishment for criminal breach
of trust).
2. Fraudulent Instruments, Manipulation of Accounts, and Property Conversion: This broad
category covers a range of forgery and manipulation techniques employed to steal money or
assets. It encompasses creating fake documents, tampering with nancial records to in ate or
hide information, or utilizing ctitious accounts to divert funds. This category draws upon IPC
sections like Section 419 (cheating by impersonation), Section 420 (cheating and dishonestly
inducing delivery of property), Section 465 (forgery), and Section 467 (forgery of valuable
security).
3. Unauthorized Credit Facilities for Personal Gain: This category targets situations where an
individual in a position of trust, such as a bank employee, sanctions loans or credit facilities
without proper authorization, often motivated by personal gain. This gain could be a bribe or
any other kind of illegitimate bene t. Relevant IPC sections include Section 409 (criminal
breach of trust by public servant) and Section 161 (abatement of abetment of a thing).
4. Negligence and Cash Shortages: This category covers instances where a loss occurs due to
negligence in handling cash or valuables. It can arise from carelessness or recklessness on
the part of the custodian. While the IPC doesn't have a speci c section for negligence, the
concept nds application in various contexts based on the severity of the oversight.
5. Cheating and Forgery (General): This broader category encompasses various fraudulent
activities achieved through cheating or forgery, not necessarily restricted to nancial contexts.
It can involve, for instance, duping someone into parting with their property through deceitful
means or creating fake documents for various purposes.
6. Irregularities in Foreign Exchange Transactions: This category focuses on violations of
foreign exchange regulations established by the RBI. It includes activities like unauthorized
currency exchange or illegal transfer of funds abroad.
It's important to remember that this classi cation serves reporting purposes. The speci c IPC
sections applied will depend on the exact nature of the fraudulent act and the evidence collected.
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