Banks’ Lethargy Helping Cyber Fraudsters to Open Accounts Without Any Hitch: HC
The court also pointed out that banks were overlooking suspicious transaction reports, which was also helping fraudsters in money-laundering transactions.
Hyderabad: The Telangana High Court found fault with the negligent approach of banks while opening current accounts, which, it held, was making it easy for cyber crooks and fraudsters to open accounts. The court also pointed out that banks were overlooking suspicious transaction reports, which was also helping fraudsters in money-laundering transactions.
The High Court wanted to know if banks had been following RBI guidelines when it came to opening of current accounts in the name of proprietors and other firms, like checking their business activity and turnover.
Justice N.V. Shravan Kumar directed State Bank of India (SBI), Keezhmad, Kerala, to file an affidavit by furnishing whether it had followed RBI guidelines in opening the current account in the name of Bharat Enterprises, which was into cyber fraud and had cheated people in crores.
The judge was dealing with a petition filed by an 80-year-old retired consultant, A.V. Mohan Rao, from Journalist Colony in Gopanpally.
Rao lost Rs 2 crore to cyber crooks, who posed as officers of Mumbai police and issued fabricated ‘digital arrest’ orders, bearing seals supposedly from the higher courts and government agencies. They threatened Rao, saying his details had come up during a money laundering probe and that he faced action. Rao transferred the amount to various bank accounts given by the fraudsters.
After investigation, the cybercrime police of Cyberabad found that a Rs 50 lakh transaction was credited to SBI-Keezhmad. The magistrate court at Kukatpally directed the bank to release the money into Mohan Rao’s account. Even after several messages from the Cyberabad police, the bank authorities refused stating that they had received such orders from various courts in the country.
The judge noticed that no order was passed by any competent court to enable the bank to comply with the release orders accordingly.
The court chided the bank's attitude and questioned why it did not follow guidelines with regard to suspicious transactions in the account of Bharat Enterprises under the Prevention of Money Laundering Act, 2002 (PMLA), where the rules mandated that banks must report details of suspicious transactions.
The judge directed the bank to file detailed additional affidavits in this regard.
