The banks and other financial institutions reported frauds worth Rs 1.38 trillion in 2020-21 and Rs 1.85 trillion in 2019-20, according to the reports released by the Reserve Bank of India (RBI).In 2019-20, RBI reported Rs 1.85 lakh crore frauds in banks alone and with over Rs 71,500 crore in 2019-18.So the real question arises what are the types of these frauds? and how they are happening despite the Reserve Bank of India’s (RBI’s) strict norms and supervision?RBI has classified these frauds as under:Misappropriation and criminal breach of trust.Fraudulent encashment through forged instruments, manipulation of books of account or through fictitious accounts and conversion of property.Unauthorised credit facilities extended for reward...

When deciding whether to extend credit to one of your clients, there are many factors that go into the process, including your customer’s income, expenses, debts, and credit history. Even if your credit department has successfully managed these criteria in the past, it can be time-consuming to do so with every new application that comes through your office. A good way to make sure you’re making the right decision about extending or denying credit to your customers while minimizing employee error is through the use of an automated credit underwriting system.Faster loan processing- Automated systems are designed to expedite loan processing by eliminating human error, so you can approve more applications quickly. This allows your employees...

The term Know Your Customer (KYC) has become quite popular lately, especially in the wake of all the regulations by governments to combat illegal financial activities. However, it isn’t the only term that you need to be familiar with if you want to stay compliant while conducting transactions or storing data on behalf of your customers. KYC was actually preceded by an older term known as Client Onboarding, which refers to the process of completing customer identification forms before conducting business with them.What is KYC? Why it is important? Know Your Customer (KYC) is an identification process that is required when opening a bank account. A copy of your proof of identity, proof of address, proof of source of funds must be provided...

The RBI (Reserve Bank of India) clarified its stance on KYC. Know Your Customer (KYC) refers to the process of identifying and verifying customer information, both within and outside India that is used by financial institutions to help prevent fraud and money laundering activities.Under the Banking Regulation Act, 1949, every bank has to maintain certain records as per the requirements laid down by RBI from time to time. In light of this, banks have been directed to ensure strict compliance with the KYC norms prescribed by RBI from time to time with respect to their existing as well as new customers.Now, the Reserve Bank of India has given the go-ahead to Video-Based Customer Identification Process (V-CIP) or eKYC, a notification dated...

Banks and other lending institutions will often use credit underwriting to assess customer’s financial capability before approving or rejecting them for a loan or credit card. Although the practice itself isn’t too difficult to understand, there are many elements of credit underwriting that can be puzzling and sometimes even intimidating if one doesn’t know what to expect.

Me: Sir what data touchpoints are critical for your underwriting process?

The Indian Fintech market is currently valued at $31 Bn and is expected to grow to $84 Bn by 2025, at a CAGR of 22%. The Fintech transaction value size is set to grow from US$ 66 Bn in 2019 to US$ 138 Bn in 2023, at a CAGR of 20%.According to the RBI, bank credit and deposits stood at Rs. 108 trillion (US$ 1.5 trillion) and Rs. 149.6 trillion (US$ 2.1 trillion), respectively, as of March 12, 2021. Extending credit and Interest income has always been one of the core revenue streams for Banks, NBFCs and other Financial Institutions.