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TNPSC Group 2 – Mains Exam Study Materials – Financial Frauds Articles

Economic or financial crime is committed against property, involving the unlawful conversion of the ownership of property to one’s own personal use and benefit. Financial frauds may involve cheque bouncing, medical, mortgage, corporate etc. Financial crimes may involve additional criminal acts such as computer crime, elder abuse burglary, armed robbery etc. Financial crimes are carried out by individuals or corporates or by organized groups.

Money launching and terrorist financing are significant financial frauds. Complexity of issues and laws involved in solving the cases of those involved, pave way for their escape sometimes with connivance of politician.

Approximately 73 lakh crore rupees have been lost due to the economic scams world wide and India has lost more than 2 lakh crores. It is acutely felt in recent years. These scams have affected the economic activities. The banks are reluctant to endorse loans because of frauds. In India banks are in need of funds for further activities. Recently, the government has issued directives to many banks not to sanction fresh loans and three nationalised banks have been merged into one entity to reduce the losses and expenses. The Central government is seeking funds from Reserve Bank of India to infuse them into the market to keep the money flow steady and credit outflow is maintained at normal levels. As Bank frauds cannot take place without collusion with Bank officers, strict vigilance must be maintained by a body created for this purpose. Severe actions – both criminal and civil will curtail the fraud to a larger extent.

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