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INDIAN BANK BRANCH AT CENTRE OF £1.3 BILLION FRAUD

22 February 2018

A Mumbai branch of a bank has been closed and three people arrested in what is believed to be the biggest loan fraud in India’s history.

One wealthy individual and companies linked to him are accused of colluding with employees at Punjab National Bank to secure fraudulent payments worth about £1.3 billion between 2011 and 2017.

The individual is understood to have left India in January. His whereabouts are unknown. Two of those arrested are bank officials. The third is a business associate of the individual at the centre of the investigation.

Indian authorities are still trying to establish how such vast lines of fraudulent credit were able to be obtained for so long.

Without wanting to pre-empt the investigation’s findings and any future trial, it is clear even from here that the bank’s fraud prevention procedures have been woefully inadequate.

If, as has been reported, one of those arrested is the bank’s manager, questions have to be asked: Who was supervising the supervisor? Was there a proper whistleblowing process in place? Are other branches of the bank vulnerable?

Read our article: TACKLING BUSINESS CRIME IN YOUR WORKPLACE