RBI guidelines of Fraud Risk, Do we see a job opportunity here?
These are basic guidelines which would go a long way towards fraud prevention & detection. Any Anti fraud expert would vouch for it that job rotation is the most effective and efficient way of fraud detection. I have heard stories about how clerks in certain nationalized banks in India, would give a pass to promotions to avoid getting transferred. There may be genuine reasons for the same or a understanding that if they move, irregularities may come to light. I have seen Indian regulator being very active in terms of taking proactive action and people working there understand what they are talking about. I recall this is second set of specific guidelines issued by RBI on fraud risk. Good to see that fraud is being recognized as a key threat, at least those organizations who think of fraud risk management related investment as a cost would understand importance of it. I expect rise in demand for Anti Fraud professionals through such steps, similarly vendors providing services like fraud risk assessment, providing fraud prevention/detection software should also see increased demand for these services. I think another guideline which is long overdue is mandatory background check for staff in financial sector, banks/NBFCs deal with money and ensure that people with tainted backgrounds don't enter the sector it is imperative that proper background checks should be done.
Comments
It is now becoming an admitted fact that incidences of frauds are now showing an increasing tendency.
I agree with your comments. However, being a Banker for the last many years, I attribute the following factors are few of the major trigger points of FRAUD.
1. Not only clerks in nationalised Banks, the Officers as well forego their opportunities for promotion. The need and greed to stay back at the same place, create a sense of indispensability, conflict of interest, monopolistic command and unwarranted control over the operations are other factors.
2. Lack of proper internal controls, clearly defined policies are the pathways of creating fraud opportunities.
3. Aggressive Banking (where each Bank, showing its own growth rate of maintaining self-decided %age to influence the public at large including stakeholders.) Recent results of SBI is a glaring examples. The Government has also expressed its concern about the numbers published by Banks where the results go with the whims and likes of the Chairman.
4. Financial statement Frauds are increasing becoming more and more preferable by most of the corporate world, exposing little to be detected at an infancy stage.
5. Poor or shady Administrative controls over the personnel, activities, systems and procedures are the contributory factors for increasing frauds which RBI also acknowledges.
6. I think that the stage has come where CFE professionals shall be required in large numbers, if not by deputation from inter-se government department/Banks, but by direct appointment recruitments. Front page news in Sunday's Business Line (05th June, 2011) - CBI and other agencies to recruit professionals and experienced bankers for investigation is an example in this direction.
Plenty of Job opportunities round the corner in India due to absence of skilled professionals in the area.
Thanks
S. Ashok (CFE)