Tuesday, March 19, 2013

Are HDFC And Other Banks Inadvertently Destroying Evidence?

Banking related frauds are on rise in India. The intensity and number of such banking related crimes has also increased a lot. This is an alarming situation where our regulatory authorities must take immediate and stringent against the culprits.

For instance, ATM frauds, Internet banking frauds, online banking frauds, RTGS frauds, money laundering offences, etc are on in India. In short, banking frauds in India have increased and it is high time for the Reserve Bank of India (RBI) to take serious note of these criminal activities that are duping Indian exchequer and bank customers of millions of cash.

RBI has in the past imposed penalties upon many banks for failure to comply with various laws and regulations. RBI is also investigating the cyber fraud happened at YES Bank. Media reports have mentioned that ICICI, HDFC and Axis banks were alleged to be indulging in money laundering and benami transactions.

Keeping in mind the seriousness of the issue, the finance ministry and RBI are investigating money laundering accusations against ICICI, HDFC and Axis bank. Meanwhile the accused banks have also started their own investigations and departmental proceedings. Many employees have been suspended till the report of departmental enquiry would be out.

According to Praveen Dalal, managing partner of law firm Perry4Law and leading techno legal expert of Asia, HDFC and other Banks must follow Sound E-Discovery and Cyber Forensics Procedure to avoid Legal Liability. While engaging in Private Investigations, Banks must keep in mind that “Crucial Evidence” is not tampered with or destroyed, opines Dalal.

The finance ministry and RBI must keep this crucial aspect in mind as well as without sufficient evidence the guilt of the accused cannot be established.