Electronic Banking Fraud in India: Effects and Controls

This paper examined the nature of electronic banking related fraud on deposit money banks in India, it effects and the controls put in place to prevent financial loss. The evolution of e-banking, major channels for e-fraud, factors responsible for the high rate of fraud, nature and methods by which computer and ICT can be employed to defraud banks. The study adopted case study research design of data collection which was based on the use of secondary. The paper focuses on Indian Electronic Fraud Forum (NeFF) Annual Report 2016. It was observed that the 2016 witnessed 19, 531 fraud cases reported as against the 10, 743 recorded in year 2015 and this represent 82 % increase. However, there was a marginal reduction in attempted fraud value and actual loss. The study revealed that there is a significant relationship between e-banking practices in India and the rate of increase in the security of banking transactions. The practice of e-banking has significantly increased the volume of banking transactions. It has also improved service delivery to customers and easy. The study shows that the effect of electronic fraud would result in loss of money which belongs to either the bank or customers. It could also destroy the bank�s reputation among others. The researcher concluded that despite the security problems associated with electronic banking practice in India, it has improved the operational efficiency of banks. Based on these findings, the researcher recommend that Government through CBN should provide adequate security measures for various electronic banking channels, review of BVN framework and sensitization of customers on electronic banking operations among others