Friday, August 24, 2012

Poor KYC drill lands 3 banks in Net frauds - Karnataka

Lack of due diligence at the time of opening two new accounts cost at least two banks in the State a few lakh rupees in 2011-12, according to the banking ombudsman for Karnataka.

Without naming the banks or whether they were in the public or private sector, M. Palaniswamy told a news conference on Thursday that because of lack of vigil, fraudsters had opened fake accounts in three banks in Karnataka. They siphoned off money from the accounts of two customers via the Web.
They remain untraced as they had given fake details in the banks’ KYC (know your customer) drill and the banks had failed to verify them.
RBI’s banking ombudsman awarded the compensation to the victims in two of these Net banking frauds. The third is pending.
However, in the last two years, banks have got wiser to Net frauds. They are placing strong three-layered firewalls, suspending e- and mobile banking facilities of suspects and complying with the RBI’s stern directives.
Net frauds per month had come down to 2-3 cases. “We are hitting them hard. Banks also face penalty for non-compliance,” he said.
Palaniswamy said his 20-member team received 3,647 complaints of bank customers during the period from July 2011 to June 2012. Of them 3563 were resolved or dismissed and 84 were carried over into the current year.
“The number has increased marginally compared to 3,470 complaints received in 2010-11,” he said, adding that the Karnataka scene was much better than in Kolkata or Mumbai.
There were fewer problems related to ATM transactions compared to 2009-10 and 2010-11. It must be because banks have largely stabilised their ATM networks and also customers have got used to the system, he observed.
There were 30 complaints about education loans, higher than earlier perhaps because those students had missed the small print. There were 732 cases related to credit and debit cards; 446 about loans and advances; 287 cases on deposit accounts and 113 pension cases.

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