Financial Frauds: Prevention & Detection during surge of COVID-19
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- By Taxmann
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- Last Updated on 15 July, 2021
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Financial frauds whenever they occur, not only result in huge financial loss but also dilapidate the organisation’s stake. If a material fraud is discovered, it shakes the investors’ confidence in business resulting in corrode. With the advancement of business practices and more reliance on technology, a silhouette of potential financial frauds walks along with business development. The concept of financial frauds is not new to business world. Frauds are being committed since time immemorial. In general terms, fraud is a deplorable intentional deception, whether by omission or commission, causing the victim to suffer financial loss and the fraudster to realize a gain.
Pandemic and resultant lockdown forced public to move to online transactions and as a result, perpetrators found another opportunity to commit the frauds. If industry-wise fraud attempts are to be mentioned, Logistic sector witnessed 224%, Telecom sector reported 200% and Financial services recorded 89.49% increase in fraud attempts. However, not all fraud attempts necessarily result into a fraud. Good news is that as per annual report of RBI (May 2021), during FY 2020-21, frauds reported by banks and other financial institutions, totalled to Rs 1.38 trillion, decreased by 25% from the previous year’s figure of Rs 1.85 trillion. In terms of numbers, Financial Institutions reported 15% fewer frauds in 2020-21, with 7,363 instances compared to 8,703 the previous year.
Read the Full Article: FINANCIAL FRAUDS: PREVENTION & DETECTION DURING SURGE OF COVID-19.
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