'BFIs should create strategy to fight financial fraud'

Kathmandu, Apr. 27: Experts have said that the Nepalese banking industry should create a strategy and crew at the earliest in order to fight against financial fraud.

“A fraud is like a virus. You continuously fight with it, and new viruses keep on emerging. Therefore, the banks need to prepare a capable crew to fight against it,” said Ajay Shrestha, chairman of the Nepal Banking Institute (NBI) while addressing a conference on ‘Financial fraud’.

Executive director of Nepal Rastra Bank (NRB) Laxmi Prapanna Niraula said that there was absence of a proper fraud reporting mechanism in most of the bank and financial institutions (BFIs).

“Banks should create a hotline or facilities for fraud reporting. However, most of the frauds were committed by the top management or in collusion with them,” he said.

President of the Nepal Bankers’ Association (NBA) Anil Keshari Shah stated that most of the BFIs did not have a full-fledged and vibrant financial fraud unit and well-equipped anti-money laundering team.

“We should wake up before there is a huge financial and reputation loss. There should be greater seriousness in countering financial frauds,” he said.

He warned the BFIs that if there was not sufficient preparedness in terms of fighting financial frauds, post-disaster remedy would be very costly.

Chief executive officer of the NBI Sanjib Subba highlighted the need for the BFIs to reflect on innovations that would be required to contain the happening of frauds on all fronts in banking.

“The objective of the conference is to raise awareness about the banking frauds and to orient the participants on the best prevailing strategic interventions in fighting the frauds,” he said.

Partner – Forensic Services at KPMG, India Suveer Khanna, head of Financial Crime Analytics Practice, Axis Bank Limited, India Rajendra Sankhlecha, and product head – Asia at Nexus Technologies Rajbir Singh presented papers on various aspects of financial fraud.

They made deliberations on various types of banking frauds like cyber fraud, ATM and card frauds, skimming, vishing, phishing, sim-cloning, syndicates and identity theft, and fraud trends and emerging threats.

They also highlighted the prevailing practices of detection of fraud events and fraud mitigation strategies.

The conference was organised by the NBI in association with Fintelekt, India.