Financial cos. prone to fraud in India: Survey

By agencies   |   Friday, 24 March 2006, 08:00 Hrs
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NEW DELHI: A study by KPMG says banking, insurance, mutual funds, asset management companies and BPOs are highly prone to fraud in India.

“Twenty-three percent of the respondents believe them (these sectors) to be the most vulnerable to malfeasance,” the survey, conducted by KPMG said.

KPMG added, “The survey also brought forth the increasing occurrence of frauds and its many forms within the IT world, specifically in the BPO (business process outsourcing) sector.”

Called “India Fraud Survey 2006,” the report said 36 percent of the respondents felt "employees posed the maximum threat to an organization in the BPO sector".

India has become a flourishing hub of outsourcing with many western firms moving some of their work to India to save costs. But cases of alleged fraud have also surfaced.

“Over the last few years frauds within the BPO sector have not only increased in occurrence but also managed to change its forms,” Deepankar Sanwalka, executive director of KPMG India, said.

“The developments of new threats has been faster than what the BPO world could ever imagine,” he added.

The survey results are based on responses from 200 companies, a majority of which have a turnover of between $112-224 million, company officials said. According to 2003 Indian government figures, seven economic crimes are committed in India every hour.

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