CHAPTER-1 INTRODUCTION
Corporate sector plays a very important role in the development of country which is elevated due to globalisation, informational and technical advancement. The necessity for industrial development in India has prompted domestic businesses, undertakings as well as transnational corporations to create a number of industries.[1] On the one hand developments are taking place in corporate sector but on the other hand corporate crimes are happening. Corporate crimes refer to any illegal, unethical or dishonest behaviour that is carried out by an organisation or by an individual acting in their official capacity as an employee of the organisation.[2]Corporate crimes are critical to India’s economic growth. Despite various observations and regulations put in place to reduce crimes, it is still observed that crimes are being committed.Banking sector plays a very important role in the development of country.[3] Banks have started developing after their nationalisation in the year 1969. Liberalisation has also played an important role in development of banking sector in the year 1991. People used to have lot of faith on banking sector. Due to this sense of security people are keeping their money in banks. Every person wants to make money. After coming up of banks as financial institutions people wanted to make money by doing frauds. The easiest method to make money is to commit crime or fraud in bank. Money that is involved in these type of cases run into lakhs or crores. Crime in banking sector directly affects the economy of the country.
Reserve bank of India has defined bank frauds as an act which is done willfully by a person during banking transactions or in account books in order to have wrongful gain. Reserve Bank of India promote people to invest their money in bank. Recently on the recommendation given by RBI, government has banned certain apps available in playstore/Appstore because these apps are dangerous in the sense that they are charging high rate of interest from the borrowers which certain borrowers are not able to pay. According to Reserve Bank of India, in past eleven years India has lost almost 1,41,489.6 crore Rupees. Out of 1,41,489.6 crore, 20,523 crore is the lost that has been suffered by private sector. So it can be said that almost 90 percent of the banking frauds have been happened from 2000-2018. Sometimes bank frauds are considered as part of white collar crimes because mostly bank frauds are committed by big businessmen who used to take huge amount of loans from banks but instead of returning the money to bank fled away to another country.
Now, as the bank frauds are happening in such a high level, therefore Indian government and RBI has also made certain committees. Certain specific laws have also been made for regulation of banks like Banking Regulation Act,1956.
[1]Oishika Banerjee, BANK FRAUDS IN INDIA, 4th ed 2013, pp. 231-234
[2] Manaswini Reddy, “BIGGEST BANK FRAUDS OF INDIA” 6th ed. 2017, pp.31-37
[3]Rupa Rege, “Banking Fraud: Challenges and Opportunities”, ECONOMIC AND POLITICAL WEEKLY, Vol. 38, No. 51/52 (Dec. 27, 2003 – Jan. 2, 2004), pp. 5377-5381