An Analysis on Frauds Affecting the Financial Security of the Indian Banking Sector

Abstract

An economy needs a well-functioning banking system—it is crucial for a country's economic growth and progress. With different economic factors influencing the banking sector, both domestically and globally, the role of the banking industry has changed over time. This has allowed the financial sector to explore new opportunities and expand its reach beyond national borders. The banking industry has undergone major transformations in response to shifts in trade and commerce, including the emergence of private sector banks, the integration of technology such as NEFT and smart cards, and changes to capital adequacy standards. These improvements have greatly increased the efficiency and productivity of the banking sector. The Indian banking industry is unique and has undergone three stages of development, from character-based lending to competitiveness-based lending, according to Singh,. Despite the growth and expansion of the banking industry, it faces many operational risks, including various types of fraud and scams.