Cheque frauds on the rise | The Daily Star
12:00 AM, October 12, 2017 / LAST MODIFIED: 12:09 AM, October 12, 2017

Cheque frauds on the rise

BB asks banks to install cheque fraud detection machines

Cheque frauds remain one of the major challenges facing banks right now despite a decline in its usage in recent times due to the option of technology-driven alternative payment channels.

To combat the fraud, the Bangladesh Bank has recently asked all banks to install fraud cheque detection machines in all their branches as the employees fail to identify fraudulent cheques with their naked eye.

The central bank's instruction came last month after a meeting with the chief executives of all banks.

“Rising cheque frauds erode the clients' confidence in the banking system,” said a BB official.

Clients filed 10 allegations of cheque frauds with the BB during the July-September period, according to data from the central bank. Previously, the BB did not segregate cheque fraud complaints from the rest.

The BB officials said the number of frauds would be much higher as the banks often resolve the complaints before customers go the central bank.

A rise in complaints relating to cheque frauds has forced the central bank to separate the complaints from other frauds from July this year, they said.

“Many non-resident Bangladeshis has become the victims of cheque frauds in recent months. We are investigating one such stunning case of a person who lives in Japan,” said another BB official.

The client deposited Tk 15 lakh with a foreign bank in Chittagong before leaving the country in 2005.

The expatriate Bangladeshi has recently learnt that Tk 14.50 lakh had been withdrawn from his account by way of cheques. Subsequently in June, he lodged a complaint with the central bank.

Earlier in 2011, the BB asked all banks to introduce the Magnetic Ink Character Recognition, known as MICR, to avert frauds.

A MICR-cheque has seven characteristics including microprint, erasable ink, chemical sensitivity and MICR code line.

But MICR-encoded cheque alone could not stop frauds.

At the bankers' meeting, Subhankar Saha, executive director and spokesman of BB, said some banks did not follow the BB's guidelines on cheque design, which gave the fraudsters an opening to embezzle depositors' money.

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