Open House: What is needed to safeguard public funds and ensure bank frauds don’t recur?

Leverage AI tools for real-time check

Bank scams can be curbed only through strong systems, not just reactions after the fact. Real-time monitoring of high-value transactions using artificial intelligence (AI) tools should be mandatory for all banks. There must be clear accountability of officials for lapses in due diligence. Strict penalties, including suspension and prosecution, should be imposed. Regular internal and third-party audits, along with surprise inspections, can help detect irregularities early. Loan approvals and fund disbursements should be fully digitised with proper verification trails to prevent manipulation.

Vineet Gandhi

Take stern action against offenders

Banking fraud isn’t just a financial offence - it is a grave breach of public trust and a threat to economic stability of the country. Protecting public funds demands a decisive and technology-led overhaul under the supervision of the Reserve Bank of India. Every transaction must be recorded and synchronised in real time across banking, corporate and government platforms to ensure transparency and traceability. Equally critical is uncompromising accountability. Offenders must face swift action, strict penalties and time-bound legal action. A centralised fraud registry should bar repeat offenders from re-entering the system.

Anil Anand

Nail senior officials, Recover stolen money

The escalating bank scams represent a sophisticated “administrative heist”, and not just a financial lapse. When senior officers entrusted with public wealth become predators, the social contract is broken. The suspension of high-ranking officials in the IDFC and AU Bank cases must not be just an eyewash, it must lead to a clinical purge of the system. It is time for a zero-tolerance crackdown where the masterminds, regardless of their ranks, are stripped of their immunity and the stolen public wealth is recovered to the last penny.

Capt Amar Jeet (retd)

Bring in 48-hour cooling-off period

In today's digital banking environment, customers are flooded with alerts, often leading to critical high-value transaction notifications being overlooked. It creates a vulnerability that fraudsters frequently exploit. To enhance customer protection, a mandatory 48-hour cooling-off period for all high-value transactions should be put in place. During this time, the receiver should also not be able to spend or withdraw the credited amount. It would give customers sufficient time to review alerts, verify legitimacy and report suspicious activity before funds become accessible.

Narinder Banwait

Frauds point to systemic gaps

The frauds highlight systemic gaps that demand urgent reforms. Banks must institutionalise internal controls, including maker-checker systems, real-time transaction monitoring, strict KYC and due diligence for high-value accounts. Accountability should be fixed at the operational level, with onus on branch officials and periodic rotation of sensitive roles. Administrative oversight must be strengthened through data-based surveillance and surprise audits.

Harinder Singh Bhalla

Govt deposits in nationalised banks

All government deposits and accounts should be in the State Bank of India (SBI) or other government banks to avoid frauds. It would also cut down on kickbacks being paid to officials. All fixed deposits from government departments and public sector organisations should be with government treasury or state-run banks to ensure financial

control at top level. It is high time public funds are maintained

and utilised in a transparency manner and standard operating procedures are defined for

proper audit of funds.

Col TBS Bedi

Take lessons from Haryana govt

The Haryana Government has made it mandatory to obtain prior approval from the Finance Department for opening accounts in private banks. The same action should be adopted by Punjab and Chandigarh. Banks should strengthen internal controls, including multi-level authorisation and verification for transactions. Thorough background checks and regular monitoring of bank employees can help prevent insider involvement in scams.

Kirpal SingH

Swift consequences can go a long way

Frauds occur when systems are weak, accountability is diffused and punishment is delayed. To safeguard public funds, the banking system needs smarter systems, stronger accountability and swifter consequences. Promote a risk-aware culture instead of blind growth chasing. Regular ethics training should be conducted for banking staff, protection and incentives should be given to insiders who report fraud and accountability should be defined at all levels.

Raj Kumar Kohli

Keep check on officials’ lifestyle

Frauds involving government funds, often result of connivance between bank and government officials, require urgent systemic checks. Keeping officers on the same seat for long periods breeds familiarity and collusion. Regular rotation is essential to break such nexus. Segregation of duties and a strict checking system can detect irregularities at the transaction stage. Real-time monitoring through public financial management system can ensure suspicious activities are flagged instantly. Discreet checks on the lifestyle of bank and government officers should also be maintained to detect disproportionate assets arising from such connivance.

Vijay Katyal

Layered approval system necessary

Layered approvals should be put in place depending on the range of payment disbursements. Individual authority should be within limits and since banks operate with public money, they should be made accountable to the public. Third-party audits should be conducted on a regular basis.

Deepak Taak

Private banks prone to frauds

Private banks are more prone to frauds. The staff at private banks is mostly employed without strict background checks. They are less sincere towards banks and lack ethics. The Centre and the state governments should not maintain accounts with private banks.

NPS Sohal

Train employees to flag frauds

Employee training is critical to ensure staff can recognise and respond to suspicious activities. However, no bank is doing it as they are designed for profit, not for the people. A robust fraud prevention and detection system is no longer optional, it is a necessity. If the government can use its powers to get instant refunds for scams involving corrupt officials, why are normal customers, the honest taxpayers, told they must wait for years in a courtroom?

SC Dhall

Need Radical reforms to address issue

Simple solutions are no longer enough, and we need bold and

strict measures. When a fraud is discovered, the personal assets of everyone involved in it should immediately be frozen. AI tools should be used for monitoring the lifestyle of bank employees. If someone earning a modest salary is buying luxury cars or expensive property, the system should alerts investigators. A "fraud inheritance law", which allows for recovery of defrauded money from a convict's family wealth, should also be introduced.

Vrinda Garg

Whistle-blowers must be protected

A publicly accessible fraud registry, naming convicted bank employees and borrowers, would discourage collusion. Whistle-blower protection must be strengthened to help insiders safely report irregularities. There should be more accountability from bank officials and they must face criminal prosecution, not just departmental action.

Anushka Rana

Raise awareness among people

Banks should have strict monitoring system in place and every large transaction must mandatorily be checked. There must be clear accountability and if any bank employee is involved in a fraud, they should face immediate and strict punishment. Public awareness is key. People should be educated not to share OTPs or trust unknown calls and links. There should be fast-track courts to handle fraud cases.

Anusha Priya

Shift govt accounts out of private banks

Heads of government department are often biased towards keeping funds in private banks to get personal benefits. Public funds can't be siphoned off without the involvement of government and bank officials. All such accounts should be shifted to state-run banks, and external and internal audits must be carried out regularly.

Wg Cdr JS Minhas (retd)

Set up fast-track courts for fiscal frauds

Bank officials found negligent or complicit must face swift disciplinary and legal action to restore public trust. Regulatory bodies must enhance oversight through frequent and surprise audits, and tighter supervision of high-risk transactions. Coordination between banks, law enforcement agencies and financial regulators should be seamless to ensure quicker investigation and prosecution. Fast-track courts for financial frauds and stricter penalties, including asset seizure, will send a strong message.

Sanjay Chopra

Address root causes to earn back trust

The recurring scams highlight systemic failures. Public funds are being siphoned off due to weak monitoring systems, poor coordination and lack of timely audits. The root cause lies in loopholes in KYC norms, over-reliance on manual processes and collusion between officials and banks. Systemic reforms, accountability and deterrence must be applied to stop it. Public trust can only be restored by addressing root causes and enforcing discipline.

Gorvi Rawat

Move away from physical certificates

Immediate systematic reforms should focus on mandatory digital reconciliation and moving away from physical certificates; strict internal controls and audits; third-party validation; and ensuring staff accountability. Strict action should be taken against anyone found colluding with the fraudsters.

Charu Malhotra

Symptoms of institutional lapses

The recurring bank scams are symptoms of deeper institutional weaknesses. The frauds expose gaps in internal oversight, delayed audits and a lack of real-time monitoring systems. Strengthening technological infrastructure is essential. However, technology alone can't solve the problem. Accountability must be clearly enforced. Bank officials who fail in their duties, whether because of negligence or collusion, should face

strict consequences, including suspension, penalties and

legal action.

Ankita Jamloki

System failure at multiple levels

Bank scams continue because systems fail at multiple levels - prevention, detection and accountability. Banks must introduce real-time fraud monitoring systems with automatic transaction blocks for suspicious activity. There should be fixed accountability of branch managers, auditors and officials, and any erring staffers must face time-bound action. A centralised fraud reporting system linking banks, police and cybercrime cells is essential to ensure action within hours. Delays allow money to be siphoned off. Stricter KYC checks and periodic account audits can prevent use of mule accounts.

Karman

Set up specialised financial court

A specialised financial court should come up for resolving such issues. It should address frauds and take any matter at hand to its logical conclusion within 10 months. The accountability of bank officials should be a top priority. AI tools can also be effectively used to deter such crimes. Anyone involved in frauds involving public funds should be blacklisted and never allowed to have bank accounts anywhere in the country.

Yogi

External audits need of the hour

Internal and external audits can be beneficial in keeping tabs on public money in bank accounts. Regular monitoring by a committee can keep such frauds at bay. Financial documents and transactions should be checked by an outside agency. Surprise checks can also be helpful. Bank accounts and transactions of senior bank officials should be monitored regularly.

Abhilasha Gupta

Swift reporting key to preventing fund misuse

We should immediately dial 1930 immediately in case of financial fraud. Following this, we should quickly contact the bank to freeze the account in question to prevent misuse of funds. The Chandigarh Police Cyber Crime Cell conducts regular campaigns to aware the public on bank frauds. Complaints can take help from the RBI-integrated ombudsman scheme for quick resolution.

Sucha Singh Sagar Bullowal

Collusion made fraud possible

Scams of such magnitude are possible because of a nexus between bank and government employees. In the IDFC case, it was not an overnight operation, but a fraud conducted over a period of time. It is astonishing the authorities never got wind of it. The government must issue an SOP to be followed rigidly. To curb such scams, Central Bureau of Investigation (CBI) inquiry must be conducted and action must be against all those responsible, irrespective of their status.

SS Arora

Comment

Public funds parked in private banks

The Rs 117-crore Smart City-MC bank fraud in Chandigarh was not an isolated lapse, but a systemic failure. So was the Rs 590-crore IDFC First Bank scam in Haryana and the Rs 150-crore Kotak Mahindra fraud in Panchkula. All of it happened in the same region, in the same time period and using the same playbook: fake fixed deposit receipts (FDRs), forged statements, shell companies and insiders on both sides of the counter. Public funds in private banks were unverified for months, sometimes years. Outsourced staff handled sensitive financial records with minimal oversight. In every case, it took an outside trigger — a newspaper report or a maturity demand — to expose what bank authorities would have caught had they checked. The officials who signed off without verification, the staff who fabricated records and the supervisors who looked the other way — they are all equally culpable. Mandatory quarterly reconciliation of government FDRs, real-time digital access for auditors to government accounts, zero outsourcing of core functions, rotation of officials and fast-track courts can help curb such frauds.

QUESTION for next week

Drug users and prison inmates are topping Chandigarh’s HIV prevalence chart. What measures should the Administration take to check the spread of HIV-AIDS, particularly among users of injection drugs?

Suggestions in not more than 150 words with can be sent to openhouse @tribunemail.com by Thursday (April 23).