Asia Pacific Journal of Research in Business Management Vol. 8, Issue 5, May 2017 Impact Factor: 5.16, ISSN: (2229-4104) www.skirec.org Email Id: skirec.org@gmail.com An International Double-Blind, Peer Reviewed, Refereed Open Access Journal - Included in the International Indexing Directories Page 8 RISK OF FRAUDS IN INDIAN BANKS IN E-BANKING SCENARIO Dr. Sahila Chaudhry Research Scholar, Department of Business Administration, Chaudhary Devi Lal University, Sirsa, Haryana, India ABSTRACT: In the present study, an attempt is made to analyse the group-ǁise ďaŶkers’ ǀieǁpoiŶt toǁards the risk of frauds iŶ puďliĐ aŶd priǀate seĐtor IŶdiaŶ ďaŶks. A saŵple of 440 ďaŶks’ offiĐials is takeŶ oŶ the basis of judgement sampling i.e. 120 from State Bank Group, 200 from Nationalized Banks and 120 from Private Sector Banks. 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 analysed through various descriptive and inferential statistical techniques like percentage, mean and standard deviation, etc. Further, ANOVA technique was used to test the hypotheses and validate the results. It is found that poor security of records, hardware and software’s is the most significant factor responsible for the risk of frauds, followed by lack of awareness about the results of fraud and alteration of data by the employees to draw information from the records. On the other hand, increase in costs associated with reiŵďursiŶg Đustoŵer’s losses is fouŶd as the most significant impact of frauds on the functioning of the selected banks, followed by increase in costs associated with regeneration of Đustoŵers’ reĐords aŶd iŶĐrease iŶ ĐoŵplaiŶts of the Đustoŵers. Further, developing policies for adequate screening of new employees is found as the most significant measure for overcoming the risk of frauds, followed by clear boundaries between acceptable and unacceptable behaviour of the employees and designing internal control including segregation of duties. It is recommended that there should be a clear organizational structure, written policies and procedures and fair employment practices to prevent fraud. An open-door policy also gives to the employees an open line of communication with the management, therefore can provide a great fraud prevention system in the organization. KEY WORDS: Security, Regeneration, Screening, Behaviour, Segregation