JMGT_V4_N4_CS1 Suresh Chandra Bihari Rosalin Mohaptra Journal on Management 2230 – 715X 4 4 70 84 Banking Technology, Fraud, State Bank of India, India A sound banking system should possess three basic characteristics to protect depositor's interest and public faith. These are a fraud free culture, a time tested Best Practice Code, and an in house immediate grievance remedial system. All these conditions are either missing or extremely weak in India. The report contains a discussion on the rise of banking frauds and various methods that can be used to avoid such frauds. A “Bank Fraud” is a deliberate act of omission or commission by any person carried out in the course of banking transactions or in the books of accounts, resulting in wrongful gain to any person for a temporary period or otherwise, with or without any monetary loss to the bank. Technology is a key driver in the banking industry, which creates new business models and processes, and also revolutionizes distribution channels. Banks which have made inadequate investment in technology have consequently faced an erosion of their market shares. The beneficiaries are those banks which have invested in technology. Adoption of technology also enhances the quality of risk management systems in banks. Recognizing the benefits of modernizing their technology infrastructure, banks are taking the right initiatives. While doing so, banks have four options to choose from: they can build a new system themselves, or buy best of the modules, or buy a comprehensive solution, or outsource. In this context banks need to clearly define their core competencies to be sure that they are investing in areas that will distinguish them from other market players, and give them competitive advantages. A further challenge which banks face in this regard is to ensure that they derive maximum advantage from their investments in technology and avoid wasteful expenditure which might arise on account of uncoordinated and piecemeal adoption of technology; adoption of inappropriate/ inconsistent technology and adoption of obsolete technology. March - May 2010 Copyright © 2010 i-manager publications. All rights reserved. i-manager Publications http://www.imanagerpublications.com/Article.aspx?ArticleId=1164