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White collar crime


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Crimes – traditional and white collar have two traits, namely, 1) an objective and 2) a modus operandi. The difference lies in the fact that the white collar criminal has a grandiose plan and also the ability, knowledge and technology to execute it. Traditionally a criminal would rob a bank by using brute force to steal cash. On the other hand a white collar criminal uses technology, mass communication and appeals to greed to steal huge sums of money. Securities Fraud, Insider Trading, Bank Fraud, Tax Fraud, and Money Laundering are all examples of white-collar crime.

So why do white collar crimes happen?
It is believed that the white collar crimes are much easier to rationalise. Committing such a crime doesn't require a gun or a knife. You may not see an apparent victim. It's easily covered up. It can secure your financial future for life and you may have plenty of opportunities.

There has been an increase in the number of white collar crimes in India over last two decades. The earlier crimes can be traced back from the time of Harshad Mehta scam to the current Reebok incident. The multicrore fraud in a private banking division of an MNC bank is a classic example of white collar crime. According to newspaper sources, it has all the ingredients of a new age white collar crime, the use of technology to manipulate or recreate instructions to transfer funds and the promise of greater returns to appeal to the element of greed.

The Indian banking and financial services sector has witnessed exponential growth in the last decade. This growth has not been without its pitfalls as incidents of fraud in the industry have also been on the rise. Deloitte’s survey “India Banking Fraud Survey – 2012” shows that banks have witnessed a rise in the number of fraud incidents in the last one year, and the trend is likely to continue in the near future. The survey points to the increased difficult scenario for banks with increased fraud incidents and low recoveries, thereby directly affecting their bottom-line.