‘Frauds carried out by bank employees have now become a global problem’
Observing that “any fraud, however negligible, associated with financial institution has to be viewed very seriously and dealt with an iron hand,” the High Court of Karnataka has declined to give relief to a former bank employee who was dismissed from service for committing fraud.
“Frauds carried out by bank employees have now become a global problem. Cash theft such as skimming customers’ cash deposit has become rampant and the employe fraud or occupational fraud is likely the largest and most prevalent threat faced by financial institutions,” the court observed.
A Division Bench comprising Chief Justice Ritu Raj Awasthi and Justice Sachin Shankar Magadum made these observations while dismissing an appeal filed by one K. Satishchandra Shetty, a former employee of Union Bank of India.
“There has to be zero tolerance as a fraudulent employee constitutes an attack against the organisation from within, by the very people who are entrusted to protect its assets and resources,” the court said.
Mr. Shetty, during 1997-98, had misappropriate a few thousands of rupees, which were given to him at his house by an account holder known to him, instead of depositing the cash.
The fraud had come to light when the customer personally visited the bank to withdraw the FD. It was also revealed that Mr. Shetty had made entries in the passbook of the customer but had not made corresponding entries in bank ledgers.
He was dismissed from service in 1999 after he admitted to the fraud during the disciplinary inquiry proceedings conducted by the bank. Though he had not challenged the dismissal order, he raised a dispute in 2003 when the bank asked him to settle his terminal benefit.
An industrial tribunal in 2007 ordered his re-instatement while setting aside the order of dismissal though the tribunal found that inquiry was conducted in a fair and proper manner. And a judge, while allowing the bank’s petition, had set aside the tribunal’s order for reinstating him.
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