White Collar Crimes in India: 15 pct spike in incidents of fraud, says survey

White-collar crimes are not new in India, there have been numerous references to such crimes since the Vedic period in India’s ancient and medieval literature. Global developments and changing socio-economic environment has made it easier for innovative criminals to deliver massive financial blows to institutions and industries. A total of 3,766 incidents of fraud were detected in FY19, a 15% spike from a year ago and losses incurred due to frauds have also risen by 80%.

White-collar crimes by definition are committed for financial gains and usually by people in higher positions. Statistics showed a trading value of 4000 crores using fake or duplicate PAN cards. An approximate 3.2 million people have lost card details at banks ATMs pointing to increasing adoption of technology by white-collar criminals.

Understanding the risk posed by white-collar crimes and to gauge the level of awareness and feel the pulse of the industry, Netrika Consulting, India’s top professional risk and integrity management company, conducted a survey titled ‘White Collar Crime Survey’. The exhaustive and in-depth report by Netrika Consulting, done in association with the Indian National Bar Association (INBA), was launched on the 26^th November 2019, on the occasion of Constitution Day at the Shangri-La's - Eros Hotel.

The report was launched by national and international dignitaries including Justice Suresh Kaith and Justice Rekha Palli from Delhi High Court, Former Justice Navita Singh of Punjab & Haryana High court,  Justice Andrew  Bell-President of Court of Appeal, Australia, Mr. Sanjay Kaushik, Managing Director Netrika, Aashish Taneja, Director Netrika,  Mukesh Tyagi-Advisor-INBA and Kaviraj Singh-Secretary General-INBA.

The survey which covered a range of respondents from Law firms, Media Houses and Corporate house has thrown up some interesting results some of which are as below:

 

1. A majority of the people (92.9%) have a clear understanding of the basic differences between white-collar crimes, occupational crimes, corporate crimes, and blue-collar crimes.
2. A majority of respondents believe that ‘white-collar crime’ includes revenge and personal gains. 1% - personal gain, 1.3% revenge, and 58.4% - all (Financial, personal and revenge)
3. 6% respondents believe white-collar crimes to have the highest detrimental impact on the company’s growth. 37.2% believe the biggest impact of white-collar crime is on reputational loss to the company and 10.1% and 6.1% on the top line and bottom line respectively.
4. 6% believe Ponzi schemes are none other than white-collar crime while 22.4% hold a different opinion.
5. The survey finds 83% of respondents agree that white-collar criminals adopt a mix of bribery, cybercrime and money laundering. 8.5% of respondents point to cybercrime, 5.9% points to Money laundering and 6% points to bribery.
6. The survey revealed that 52.4% and 47.5% of respondents believe that white-collar crimes pose an inherent risk and residual risks respectively. An overwhelming 83.7% of respondents also agree that white-collar crime poses all types of risks including reputational, business continuity and financial risk for a company.

Sanjay Kaushik Managing Director, Netrika Consulting said, “Global development and changing socio-economic environment have made white-collar crimes a major impediment to success for organizations. While the government is working on policy-level initiatives to mitigate the risk, a lot more needs to be done at the grassroots to make the laws effective and impactful”.

“This report will be a handy guide for corporates as they seek to get a better grip on white-collar crime, applicable laws and acts, available mitigation measures and global initiatives underway to combat the menace” he added.

The survey captures the need for more grassroots initiatives to supplement policy level initiatives by the government to make legislation against white-collar crimes more effective and impactful.

The survey booklet is also a ready reckoner for understanding the emergence of white-collar crimes in India, reasons for the growth of white-collar crimes, the difference between white-collar and other crimes, legislations against white-collar crimes in India and the global initiatives to combat white-collar crimes.