Lawstreet Journal

Avoid Middlemen to Source Deposits: Canara Bank's Alert Branches After two FD frauds come to the fore

Lawstreet Journal 15 Jun 2020 10:30pm

Image courtesy: Lawstreet Journal Business Avoid Middlemen to Source Deposits: Canara Bank's Alert Branches After two FD frauds come to the fore

In an inter-office memorandum, state-owned Canara Bank has cautioned branches of possible fraud in the name of bulk deposits of government organizations.

According to reports, the bank recently found two incidences of fraud that occurred in government organizations' bulk deposits, involving a sum of Rs 47 Crore and Rs 100 Crore. 

The incident came to light when another group of people approached the bank for arranging another Rs 250 crore bulk deposit with similar requests for opening fixed deposits and current accounts.

The bank released a 'Scam Educational Show' after the scam, where it discussed the modus operandi, bank vulnerabilities in the banking system, and how fraud can be avoided in the future. 

In addition to this, the bank asked each branch to ensure that the deposit is made for the same amount requested and the same period. Branches should also avoid employing intermediaries for securing deposits.


Modus Operandi Of Fixed Deposit Fraud

A branch gets a lead from a government organization to secure a bulk Rs 100 Crore deposit. After confirming the interest rate for one year and one day, an amount of Rs 100 crore is transferred from another bank. The branch receives a letter from the organization immediately after receiving the amount, to keep Rs 50 crore in a fixed deposit and transfer Rs 50 crore to a newly opened current account. 

Documents required to open the current account are also submitted. Rs 47 Crore is transferred from the current account to various accounts within ten days. Subsequently, it comes to light that the current… Continue Reading...

Tagged: Canara Bank  
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