I draw the attention of Reserve Bank of India to
my observation in one of the major Banks in India where two debits
(part of several unauthorized debits that occurred in the account)
reflect in the customer’s account at the branch but does not reflect
in the records of the Internet Banking department extracted from
perhaps the core banking server.
What does this reflect?
1. An amount of money has been debited to a
customer and it has just vanished.
2. It appears that the traditional double entry
book keeping in the Bank where every debit must have a corresponding
credit does not work in the internet banking system.
3. How can the accounts of the bank be considered
reliable?
4. Has any body done a software code audit in
this Bank?
5. Is there a software related fraud to siphon
off money from the customers?
6. What is the role of RBI in such a scenario?
7. Has the Bank reported this discrepancy to RBI?
8. Has the Bank conducted an internal enquiry?
9. Who should be held accountable for such
issues?
10. Is there a need for a software audit to be
conducted on all Banks so that the hard earned funds of Indians are
safe in the bank?
Last but not the least, is it only one such
transaction in the Bank or are there many others in this Bank and in
other Banks?
Are we sitting on a volcano of frauds that may
burst any time and take the Indian bank down and along with it the
Bank shares in the stock market and the economy?
A few years back I had brought to the notice of
the public another software glitch in another major bank which was
published even in the media. That was also an indication of an
underlying problem in software according to which it appeared that
the expenses debited on interest account did not tally with the
interest credited to another account in the same transaction
indicating possible leakage of income of an estimated several
thousand crores.
However the bank gave some flimsy explanations
and the issue was not further explored.
As an ex-Banker, I am aware of the adverse effect
a news of this kind may have on the specific Bank and hence not
discussed the name of the bank/s here. However, if a responsible
officer of Reserve Bank of India contacts me officially, I will be
able to share the information that would be necessary for them to
take corrective action.
Recently I tried to get some responsible RBI
officers to attend a seminar in Bangalore where the risks arising
out of such negligence by Banks were discussed. However the desired
functionaries could not attend the seminar. It is essential for RBI
to keep its eyes and ears open to get such information from experts
so that they can take pro active steps in safeguarding the interests
of depositors.
I hope the indicative information in this article
will make RBI or the Minsitry of Finance to take necessary action
which the depositors of Banks would expect from the regulatory
authorities.
