Complaint against CEO of apex bank
Bangalore: Feb 19, 2013 DHNS
A complaint has been lodged before the Lokayukta against the Karnataka State Co-operative Apex Bank Limited Chief Executive Officer, Ashwath Gowda and his personal secretary, Manjunath, for “not selecting 77 clerk and cashier positions on merit” as mandated by a government order.
The complainant - M T Girish, working secretary of Karnataka State Human Rights Commission - has alleged that marks have been tweaked to ensure selection of some candidates.
The complaint also stated that the officials of the bank increased the number of vacancies to 102 from 77, without getting the sanction of the government.
The complainant - M T Girish, working secretary of Karnataka State Human Rights Commission - has alleged that marks have been tweaked to ensure selection of some candidates.
The complaint also stated that the officials of the bank increased the number of vacancies to 102 from 77, without getting the sanction of the government.
Human resources: the first defence against insider
fraud risk
HR departments are key in preventing internal fraud - and in dealing with the consequences, Nick Kochan finds
Internal fraud is one of the fastest-growing and most complex criminal threats to any financial organisation. Banks and other financial firms deploy ever more sophisticated systems to forestall attack from outside – whether unauthorised transactions, loss of customer data, loss of intellectual property, money laundering or corrupt payments – but all of these may still be vulnerable to an insider, who by definition has some degree of trust from the organisation and knowledge of its internal systems and their weaknesses.
Internal systems can provide some protection, but defending the bank against this kind of threat is also the job of the personnel or human resources (HR) department, which has a crucial role to play as gatekeeper and supervisor in the fight against insider fraud.
The insider threat is highly varied – fraud occurs at every level from junior administrative staff to directors and chief executives. Top performers and long-serving senior directors are liable to slip through the net, at least until they trip themselves up. Financial departments are unlikely to question the expenses of a director who has been with the company for a long period and delivered good results – or the behaviour of a trader who delivers numbers greatly in excess of the market norm. Often, fraudulent employees may appear to be the most diligent in the department.
Ideally, these individuals need to be excluded from the company before they wreak untold damage, in monetary and reputational terms, by a recruitment process that is as alert to fraud risk as it is to job competence. This puts HR into the front line. They create the initial application form, vet it for inconsistencies, downright lies and unexplained gaps and then interview the candidate.
What must they do to spot the liar or the thief? There is no substitute for a thorough investigation at the recruitment stage, says Maryam Kennedy, partner for fraud at Ernst & Young. “If someone is prepared to tell small lies on their CV, they are more likely to be prepared to tell big lies at a later stage in their period of employment. At the recruitment phase you pick that up through proper vetting of the CV.” Kennedy advises thorough vetting of references even where the job is quite senior and the individual has an established career.
The black and white view of telling lies is not shared by all members of the HR profession. Some are prepared to regard the CV as a selling document where some flexibility with the truth is permitted. So if the individual has the skills and is only elaborating his claim to a job, rather than making outright lies and distortions, some untruths are generally seen as permissible, says Richard Hurley at Cifas, a UK private-sector fraud prevention service.
“There is a difference between an applicant who claims a false identity or includes false documentation, and the applicant who distorts a claim to his advantage. If you say you are a team leader, but you don’t have people reporting to you, is that a material difference? There are projects I have led where no one else is involved so this is more of a semantic trick. I am misrepresenting a fact to gain an advantage. If I say I get a guaranteed bonus when I have received one every year without there being a contractual agreement, how serious is that lie? HR would say there is no problem in lying, if I exaggerate my credentials.”
But Hurley draws the line at claiming qualifications which have not been earned or awarded. “If the applicant adds an A-level to his qualifications, that is fraud. If you pretend to be a doctor and you don’t have the qualifications, that is obvious fraud. The key point for the HR person is whether the applicant can or cannot do the job.”
This latter type of CV-padding has been rising fast, according to Cifas’s own figures: Cifas members reported 109 cases of employment fraud which reached the level of a clearly criminal act in the first half of 2012, compared with only 49 in the first half of 2011.
The HR department needs to see the CV through a sceptical filter, bearing in mind that honesty is a primary and essential element of personality for anyone that you want to employ. Kennedy says: “It is acceptable to emphasise the skills you have that show you are equipped to do the job. It is fine for the person to show how his long experience equips him for the job and how this is helpful to the employer. But what is not acceptable is for the applicant to say, ‘I don’t really have what you want, so I am going to lie about it’. That makes him the sort of person who is prepared to think that lying to get what he wants is justifiable. That is clearly not the sort of person you want in your company.’
Internal systems can provide some protection, but defending the bank against this kind of threat is also the job of the personnel or human resources (HR) department, which has a crucial role to play as gatekeeper and supervisor in the fight against insider fraud.
The insider threat is highly varied – fraud occurs at every level from junior administrative staff to directors and chief executives. Top performers and long-serving senior directors are liable to slip through the net, at least until they trip themselves up. Financial departments are unlikely to question the expenses of a director who has been with the company for a long period and delivered good results – or the behaviour of a trader who delivers numbers greatly in excess of the market norm. Often, fraudulent employees may appear to be the most diligent in the department.
Ideally, these individuals need to be excluded from the company before they wreak untold damage, in monetary and reputational terms, by a recruitment process that is as alert to fraud risk as it is to job competence. This puts HR into the front line. They create the initial application form, vet it for inconsistencies, downright lies and unexplained gaps and then interview the candidate.
What must they do to spot the liar or the thief? There is no substitute for a thorough investigation at the recruitment stage, says Maryam Kennedy, partner for fraud at Ernst & Young. “If someone is prepared to tell small lies on their CV, they are more likely to be prepared to tell big lies at a later stage in their period of employment. At the recruitment phase you pick that up through proper vetting of the CV.” Kennedy advises thorough vetting of references even where the job is quite senior and the individual has an established career.
The black and white view of telling lies is not shared by all members of the HR profession. Some are prepared to regard the CV as a selling document where some flexibility with the truth is permitted. So if the individual has the skills and is only elaborating his claim to a job, rather than making outright lies and distortions, some untruths are generally seen as permissible, says Richard Hurley at Cifas, a UK private-sector fraud prevention service.
“There is a difference between an applicant who claims a false identity or includes false documentation, and the applicant who distorts a claim to his advantage. If you say you are a team leader, but you don’t have people reporting to you, is that a material difference? There are projects I have led where no one else is involved so this is more of a semantic trick. I am misrepresenting a fact to gain an advantage. If I say I get a guaranteed bonus when I have received one every year without there being a contractual agreement, how serious is that lie? HR would say there is no problem in lying, if I exaggerate my credentials.”
But Hurley draws the line at claiming qualifications which have not been earned or awarded. “If the applicant adds an A-level to his qualifications, that is fraud. If you pretend to be a doctor and you don’t have the qualifications, that is obvious fraud. The key point for the HR person is whether the applicant can or cannot do the job.”
This latter type of CV-padding has been rising fast, according to Cifas’s own figures: Cifas members reported 109 cases of employment fraud which reached the level of a clearly criminal act in the first half of 2012, compared with only 49 in the first half of 2011.
The HR department needs to see the CV through a sceptical filter, bearing in mind that honesty is a primary and essential element of personality for anyone that you want to employ. Kennedy says: “It is acceptable to emphasise the skills you have that show you are equipped to do the job. It is fine for the person to show how his long experience equips him for the job and how this is helpful to the employer. But what is not acceptable is for the applicant to say, ‘I don’t really have what you want, so I am going to lie about it’. That makes him the sort of person who is prepared to think that lying to get what he wants is justifiable. That is clearly not the sort of person you want in your company.’
Three arrested for Rs 60-crore cooperative bank loan fraud
The Economic Offences Wing (EOW) of Mumbai Police Crime Branch has made the first set of arrests in a scam in which fake loans worth over Rs 60 crore were disbursed by Mumbai District Central Cooperative Bank in Kurla, with hundreds of people to whom the loans were purportedly given being unaware of the transactions.
EOW officers said at least 23 cooperative credit societies were involved in the loan fraud, as they had forged bonds and customer identification papers to get loans sanctioned from the bank. The scam came to light in June last year, when around 400 residents of Asalfa in Ghatkopar and Kurla received letters from the bank asking them to repay loans they had never availed themselves of. The bank lodged a complaint with the EOW in July.
The probe has gathered momentum with the arrests on February 12 of Basavraj Chougule, Dayanand Thorat and Namdev Tapase, who are chairperson, treasurer and secretary respectively of Jivhala Cooperative Credit Society. More arrests are likely soon and 63 other accused being probed by the police, said EOW officers.
"The fraud involves around Rs 64 crore and was carried out by 23 cooperative credit societies in collusion with officials of the Mumbai District Central Cooperative Bank.," said police inspector S S Sohni of the banking unit of EOW.
Police said some of those duped had never applied for loans through the cooperative credit societies. Others had applied to a single cooperative credit society for a loan, but their papers were forged.
"The cooperative credit societies used forged bonds and identification papers of unsuspecting persons and secured loans. Proper verification of documents was not done by the bank and bank officials are suspected to have colluded in the fraud," said Sohni.
Additional Commissioner of Police (EOW) Rajvardhan said, "It is not possible for such fraud to have taken place without the collusion of some bank officials. This aspect is under investigation."
