Always a contentious yet lively discussion, fraud was addressed at the 2010 RBAP-MABS National Roundtable Conference in Manila on June 2-3.  Ms. Girlie Lopez, MABS Regional Coordinator for Visayas, kicked off the panel discussion by describing the many faces of fraud and providing a few helpful tips for bank management.

At the loan solicitation stage, fraud can take the form of bribes, “processing fees”, over-appraised collateral and false identification. At the collection stage, fraudulent activities include non-remittance of collections, altered or fake official receipts, and modification of management information system (MIS) records. Additional forms of fraud can be unauthorized restructuring or extensions of payment schedules, unauthorized withdrawals, writing-off recoverable assets and false benefits claims for insurance.

Account officers and supervisors have the greatest opportunity to carry out these activities. That is why bank executives must be diligent in their management of fraud. Ms. Lopez noted that banks can prevent fraud by institutionalizing a culture of professionalism, honesty and compliance while evaluating the effectiveness of their internal control systems and policies.   [Read more...]