An infamous bank fraud of huge amount was detected in February, 2018 in India. The Bank suspended 10 officers over the scam and referred the matter to Government of India’s top investigative agency. The Bank in a letter warned the other banks by revealing the modus operandi used by the bank officials.

It was found that none of the transactions were routed through the CBS system, thus avoiding early detection of fraudulent activity. In case of LoUs, it has been found that at the time of issuing LoUs for a smaller amount by SWIFT, the transaction was routed through the CBS system but subsequently, amendments were made in these LoUs by substantially enhancing the amount of LoUs and transmitted through SWIFT without routing these enhancements through CBS.

LoUs were opened in favour of overseas branches of Indian banks for import of goods for a period of one year for which as per Reserve Bank of India guidelines, the total time period allowed is 90 days from the date of shipment.

When fraudster companies asked for LoUs for raising buyers’ credit after the retirement of the Bank employee involved in the scam, the Bank sought 100 per cent cash margins for issuing LoUs . Thus fraud came to light.

ROLE OF CREDIT INFORMATION PROVIDERS :

There are few Credit Information providers in the country who are on the panel of banks. Mira Inform is one of them having existence of over 36 years, providing real-time credit information to several hundred clients in and outside India.

During 2011-16, there were 38 credit opinion reports prepared by Mira Inform for this banks on fraudster overseas entities. Findings in all those reports were negative and unfavourable but perhaps, these were ignored, overlooked or removed from the bank’s records. Hence, investigative officers asked us to issue the duplicate copy of each report. Mira Inform has spontaneously provided all the copy of past reports prepared for this fraudster companies.

OUTCOME

The concerned department was astonished to find all 38 accurate reports which were prepared and provided to the bank for their foreign exchange transactions of the referred fraudster companies. The concerned investigative officer was impressed with Mira Inform’s high quality reporting and as if he said that the country and bank could have saved several thousand crores of rupees based on Mira Inform’s credit opinion reports.

Following message of an investigative officer has encouraged Mira Inform’s to do more and more ‘good work’

“We salute to the hard working and honest Indians who are contributing to Indian growth story by their dedication and zeal”.