Krishnamurthy Nagarajan 928 days ago

There are some mistakes in the report. Integrating SWIFT with internal CBS has both advantages as well as disadvantages. The Bangladesh fraud was in fact facilitated dur to the integration. So far there is no case of hacking the SWIFT. Bangladesh fraud was by hacking the bank''s software and passing instructions via SWIFT by the STP. If it was not integrated, Bangladesh would not have been affected. Since the fraud should be done afresh through SWIFT by stealing passwords or by overstepping authority. This can be done anywhere in the world in any bank. What about Nick Leeson of Ingbearings or the Society Generale fraud of 6 bn$s? The fact is that the officer fraudulently went on issuing/extending LOUs and supervision at the higher levels was lax or conniving. Swift entries cannot be cancelled and a list of all messages are preserved in the system and so it is clear that suprrvision was also involved. Every entry in the foreign currency account of the bank has to be supported by authenticated viuchers. So here also colludion in fraud. Credit limits are reviewed every half year and renewed every year. So when the liability was going up disproportionately, what was the Credit dept. doing. in the reviews and renewals? So they have also colluded. What was the concurrent auditor doing all these years? Branch may not have powers of more than Rs. 3 to 5 crs. per party and so sanction has to come from higher authorities. What were they doing? There is a regular internal annual inspection and also Inspection of big branches by RBI directly. What were they doing? RBI conducts annual inspection of currency dealings and nostro accounts maintenance. What were they doing? If what Nirav Modi is correct then his company balance sheet should have shown the correct outstanding of the borrowings. Since banks cannot lend more than twice the owners'' funds, outstanding of 11400 crs. implies that the co. had total networth of 5700 crs. Is that so? How is it that the co''s Auditors did not smell anything wrong? They should be probed for possible collusion. (Recall PWC of Sathyam and Accenture of Enron). What were the Statutory auditors(Approved by RBI ) of the bank doing? Any action against them? What were the directors of the bank doing all these years as loan proposals are beyond the powers of even the Chairman and comes under Board powers. If matters were not brought to the board, you canno blame board members (other than Chairman and EDs).