Bank fraud in India – Just 3 simple steps

From the facts given by Ms. Anita, it is a simple case of FRAUD by CONNIVANCE of the person getting the cash and Bank employee ordering payment of a cheque crossed "A/C PAYEE". The moment a cheque is crossed it becomes "ORDER", even if bearer words are written on the cheque and cannot be paid in cash over the counter. the person writing the cheque has every right to recover the money from the Bnak, as it was not paid as per mandate, i.e., not paid in due course and without negligence.  

The company could have prevented the fraud by ascertaining the balance in their bank account over telephone or by sending the Pass Book through another employee. Nowadays, online banking allows the account holders to view their bank accounts real time.Hence, online banking should be popularised.SMS Alerts introduced in many banks is another important development. 

An employee of a customer used to deposit cash into the bank everyday. Those days computerisation is not existing. He will collect the counterfoil, after depositing cash, show it at the counter and get the pass book updated. Later he devised a plan to deceive bank and his own company. When he was asked to deposit 2 lakhs, he used to deposit 20,000 only and later alter the counterfoil, show it at the counter and get his passbook updated. After 2-3 months, the company issued a cheque to an outside party, it was bounced. When the company owner confronted the Banker with counterfoils and passbook, the plan is exposed. Bank said we are not responsible. Company said we relied on pass book. It has gone to a court. Court decreed that it is a case of 'negligence' on the part of the counter staff, since he is not supposed to depend on outside information to update the entries. He should have relied on the voucher receive from Cash Counter. The concerned person was dismissed from the bank and the bank is forced to pay the money to the company. It is a case of Negligence not Fraud.

It can not be treated as "Bank Fraud" It is to be treated as "negilgence" on the part of the Bank. Fraud is falsification of accounts, misappropriation, transferring fund from one account to the other, with an intention to dupe the customer..etc I will tell you a story on negligence in a different posting.

In the above mentioned story it is not clear if the words 'or bearer' were crossed while issuing the cheque. Secondly,I understand that RBI has issued the guideline that cutting and overwriting on the cheque are not to be allowed if it alters the basic requirements in the cheque.Further it is not clear how a word "order' comes in 'A/c payee' crossing. An account payee cheque can only be credited to the account of the payee and cannot be paid over the counter.
The case should be taken up with bank's ombudsman and R.B.I.

The employee of the computer guy is regular in going to the bank on behalf of the computer guy for the transactions on his behalf and this might have been the reason for the concerned bank people to allow cash, In no way the act can be supported.  As a customer you have the right to get back amount wrongfully debited to your account on account of the negligence of the bank.

Thanks for sharing ur experience with us..........hope now people would pay more attention when doing banking transaction.......

Thanks for sharing wonderful eye opening info and the negligence of the concerned bank in this case....so i would suggest you to take some firm step by complaining the matter to Reserve Bank of India officials providing all the details about the case and request for some firm action against the bank to stop this kind of negligence in future.....wish you good luck.

That's great , you took the step against it.

thanks 4 ur useful info..........

Good, you reacted very well we should educate others too in this type of transactions and one more things FAKE CURRENCY IS SUPPLIED THROUGH ATM'S and bank denies it what should we do now?

Lot of thanks Anita for updates, daily i am watching these type of fraud case

thanks Anita for updates, daily i am watching these type of fraud case, yesterday one Gwalior's man have arrested in ATM fraud case, he is just BA first year student...