Bank frauds are a harsh reality these days, with an average of one being committed every hour. According to recent studies, the rate of bank frauds has increased in 2017-18 with public sector banks constituting around 80% of 6000 frauds amounting to nearly INR 25,000 Crores. With the changing pattern of questions in competitive entrance exams, this has become a contemporary topic, which tests the candidates’ knowledge of the banking sector. Therefore, knowing about the different types of bank frauds in india can help you crack your MBA entrance exam.
5 Bank frauds in India
Here are some of the common topics under Bank Frauds in India that you should be familiar with.
- Identity Theft
As the name suggests, scammers tend to steal your identity and use it to purchase two-wheeler loans, personal loans and even credit cards from banks. Once they are done with this, the whole responsibility of repaying the money falls on you. The respective bank will send you a notice, and in case you fail to pay the money back, you will be marked as a defaulter. Additionally, your credit score will take a heavy hit and decrease. In order to avoid identity theft, make sure that you evaluate and check your credit report on a regular basis.
Occasionally, you might have received emails stating that you will be able to avail a loan without checking your credit score. However, make sure that you do not fall for this, as these emails are fraudulent and are known as phishing emails. The sole motive of phishing emails is to obtain your bank details so that the scammer can exploit them and steal your money. Beware of this practice, as many tend to disclose their bank details in order to score a good deal.
- Fraudulent Loans
When it comes to fraudulent loans, swindlers steal money from bank accounts in the name of loans. As far as such loans are concerned, the borrower tends to be an accomplice, a corrupt bank officer, or a business organization. Once the loan is availed, the concerned will file for bankruptcy, hereby announcing that he will not be able to pay the loan. Additionally, in certain cases, the borrower can also be a non-existent organization, and the loan will be taken just to steal a huge amount of money from several banks.
Vishing is similar to the fraudulent practice of phishing and is known as voice phishing. In this method, scammers call people up, pose as people from well-known and reputed banking institutions, and want your bank details. In case they get the details, they exploit those details to steal money from the accounts.
- Card Skimming
Card skimming is one of the most common bank frauds out there. In this practice, scammers use an electronic device, known as a skimmer for stealing card details. If your card runs through the skimmer, it will obtain all your card information from the magnetic strip on your credit/debit card. After this, all the important information is copied on a blank card, which is then used by the scammers to steal money from your bank account.
These are some of the most commonly asked questions in the Interview round of the MBA entrance exams. Having a good idea of contemporary financial topics will further help you with competitive exam preparation for entrance exams and bank exams.