Analysis of risk of fraud by employees in private sector banks Prof. Singh Sultan Department of Business Administration, Chaudhary Devi Lal University, Sirsa-125055, Haryana, India Online published on 27 July, 2017. Abstract In the present study, an attempt is made to study the various aspects of risk of fraud by the employees in e-banking in the selected private sector banks. A sample of 120 respondents (banks’ officials) is taken on the basis of judgement sampling. The primary data were collected with the help of pre-tested structured questionnaire on five point Likert scale i.e. Strongly Agree (SA), Agree (A), Neutral (N), Disagree (D) and Strongly Disagree (SD). The collected data were analyzed through various descriptive and inferential statistical techniques like percentage, mean and standard deviation, etc. Further, ANOVA technique has been employed to test the hypotheses and validate the results. It is found that poor security of records, hardware and software system is ranked as the most significant factor responsible for the risk of fraud by the employees in AXIS and HDFC, and little fear of exposure and likelihood of detection of frauds in ICICI. On the other hand, bank may face withdrawal of approvals from regulatory bodies is ranked as the most significant impact of the risk on the functioning of AXIS, increase in costs associated with reimbursing customers’ losses in HDFC and ICICI. Further, clear boundaries between acceptable and unacceptable behaviour of employees is ranked at the top in AXIS, developing policies for adequate screening of new employees in HDFC and ICICI as measures for overcoming the risk of fraud by the employees in the selected banks. It is recommended that there should be an open-door policy in the organization to give employees an open line of communication with management. Internal control programmes should be monitored and revised regularly to ensure that they are effective and current with technological advances. Certified Fraud Examiners (CFE) and Certified Public Accountants (CPAs) should be hired to analyze the existing company's policies and procedures, and recommend appropriate anti-fraud policies and procedures. Every employee of the organization should be aware of the fraud risk policy including the types of fraud and the consequences thereof. Top Keywords Exposure, Approval, Reimbursing, Screening, Behaviour. Top |