ABSTRACT

This study is a critical look into the regulatory and enforcement-legal regime that regulates financial fraud in India, especially the role and effectiveness of key regulatory and investigative agencies including the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Ministry of Corporate Affairs (MCA), Enforcement Directorate (ED), and Serious Fraud Investigation Office (SFIO). The research focuses on the statutory provisions in legislations such as Companies Act, 2013, Prevention of Money Laundering Act, 2002 (PMLA), Prevention of Corruption Act, 1988, Bharatiya Nyaya Sanhita, 2023, Bharatiya Sakshya Adhiniyam, 2023, Fugitive Economic Offenders Act, 2018 (FEMA), 1999 and the SEBI Act, 1992.

The study is mixed doctrinal and empirical in nature, which are based on statutory analysis, judicial decisions, annual reports, RTI responses, policy documents and case studies of financial frauds such as PNB–Nirav Modi scam, Yes Bank crisis, IL&FS collapse and DHFL fraud. The research pinpoints key shortcomings in fraud detection and successful prosecution, including: delays, jurisdictional issues, lack of inter-agency cooperation, low conviction rates, and difficulties with cross-border enforcement and asset recovery.

Additionally, it examines the emerging importance of Forensic Accounting, Artificial Intelligence, Cyber Forensics and Data Analytics in combating Fraud; and the gaps in the technology and institutional framework for fraud detection in India. Although it maintains that there are rich laws and strong enforcement agencies, the root of the problem is neither lack of laws, but a failure of enforcement and delayed enforcement.

The study ends with suggestions for reforms including the need for better inter-agency coordination by creating a centralized enforcement system, merging the overlapping legal frameworks, boosting technological adoption, boosting the forensic and investigative capacities, greater international cooperation and better corporate governance and compliance. Overall, the study underscores the need for a new regulatory paradigm in India to combat financial frauds, one that is proactive, technology-driven, and enforcement-based, prioritizing market integrity, investor confidence, and economic stability.