PRESENTATION BY:-

NITIN KUMAR JOSHI

 Bank fraud is a criminal act that occurs when a person uses
illegal means to receive money or assets from a bank or
other financial institution. Bank fraud is distinguished from
bank robbery by the fact that the perpetrator keeps the
crime secret, in the hope that no one notices until he has
gotten away. The term bank fraud also refers to attempts by
a person to obtain money from a bank’s depositors by
falsely pretending to be a bank or financial institution. To
explore this concept, consider the following bank fraud
definition.
 The criminal offense of bank fraud is deliberately engaging
in a secret scheme or deception intended to defraud a bank
or financial institution, to obtain money or property owned by
the bank or financial institution. Bank fraud is considered to
be a white collar crime.
 There are dozens of ways in which an individual can commit bank fraud. Some
of these schemes are more complex, and affect more people or institutions,
garnering harsher penalties than others do. Common types of bank fraud
include.
 Bank Impersonation – one or more individuals act as a financial institution, often by
setting up fake companies, or creating websites, in order to lure people into depositing
funds.
 Stolen Checks – fraudsters may obtain jobs that provide access to mail, such as the
post office, mailbox stores, a tax authority, or corporate payroll company. After stealing
checks, they open a bank account using an assumed name, and deposit the checks.
 Forgery – forgery occurs when a person alters a check by changing the name or some
other information on the face. Altering the amount of the check, such as adding a zero to
the end of a number, can turn a $20 check into a $200 check, putting more cash into the
forger’s pocket. Forging a person’s signature in order to cash or deposit a check also
falls under this category.
 Fraudulent loans – an individual who takes out a loan, knowing that he will immediately
file bankruptcy, has committed bank fraud. The same is true if the borrow uses a false
identity in order to become approved for a loan, or forges information on a loan
application.
 Internet Fraud – as it relates to bank fraud, internet fraud occurs when someone
creates a website for the purpose of posing as a bank or other financial institution, to
fraudulently obtain money deposited by other people.
SWIFT stands for the "Society for Worldwide Interbank Financial
Telecommunications". It is a messaging network that financial institutions
use to securely transmit information and instructions through a standardized
system of codes.
 1. Neerav Modi Bank Scam

 2. Vijay Mallya Bank Scam

 3. Allahabad Bank Scam

 4. Rotomac Pen Scam

 5. R P Info Systems Bank Scam

 6. Simbhaoli Sugar Mills Bank Scam

Nirav Modi the billionaire in the middle of this controversy, is a luxury
diamond jewellery designer who was ranked #57 in the Forbes list of India's
billionaires in 2017.

How the fraud was detected

According to the complaint filed by PNB with the CBI on January 28, the
fraudulent issuance of Letters of Undertakings (LOU) was detected at the
Mid Corporate Branch, Brady House in Mumbai. A set of partnership firms -
- Diamond R US, Solar Exports and Stellar Diamonds -- approached the
bank on January 16 with a set of import documents and requested for
Buyer's Credit to make payments to overseas suppliers. The firms have
Nirav Modi, his brother Nishal Modi, Mr. Nirav's wife Ami Nirav Modi, and
Mehul Chinubhai Chokshi as partners.
Buyers Credit is, typically, a short-term loan facility extended to an
importer by a bank to finance goods and services. It is a common mode of
transaction in international trade where a bank extends credit to the
importer and a finance agency based in the exporter's country guarantees
the loan.
Remaining Part …..
As there was no sanctioned limit in the name of the firms, the branch officials
requested the firms to furnish 100% cash margin for issuing the LOU for raising the
Buyer's Credit. At this, the firms contested that they have been availing this facility
in the past; but the branch records do not corroborate this. On digging further, the
bank officials discovered that two of its employees had fraudulently issued LOUs in
the past without following prescribed procedures and approvals. The employees
had then transmitted SWIFT instructions to the overseas branches of Indian banks
for raising Buyer's Credit without making entries in banking system to avoid
detection.
The complaint also said that the funds so raised for the payment of the Import Bills
have not been utilised for such purposes in many cases. The 11,400 crore scam
comes at a time when the Central government is attempting to provide a breather
to ailing PSBs, having announced a 2.11 lakh crore capital infusion to the sector in
October 2017.
Business tycoon and Rajya Sabha member, Vijay Mallya, is in trouble
for his hush-hush escape from the country right around the time he
is wanted by the Enforcement Directorate for money laundering.
Mallya earned himself the tag of being a liquor baron after he turned
United Spirits - the company known for Kingfisher beer - into India's
biggest spirits maker.
But his airline service, the Kingfisher Airlines, did not match similar
fortune.
Mallya's Kingfisher Airlines went out of operation in 2012 after it
failed to pay salaries to its employees, and ended up with loans of
more than Rs 9,000 crore to various banks. The State Bank of India
was the biggest lender with 1600 cr. followed by the PNB 800 cr, IDBI
650 cr and Bank of Baroda lend 550 cr. Malya left India on March 2,
2016 and hiding in the London and the government of India is
fighting for his extradition till date.
 The number of bank frauds in India is
substantial. It in increasing with the passage of
time. All the major operational areas in banking
represent a good opportunity for fraudsters with
growing incidence being reported under deposit,
loan and inter-branch accounting transactions,
including remittances.
Bank fraud is a big business in today's world.
With more educational qualifications, banking
becoming impersonal and increase in banking
sector have gave rise to this white collar crime.