To the common man, Banks represent the ultimate in security. Believing in their infallibility as to safety, he keeps his valuables and deposits his hard earned savings with them. Free economy, for its survival and growth would need an efficient, trustworthy and service oriented Banking system. Anything untoward happening to undermine the trust of the common man in the Banking system will have far reaching consequences on the Economy.

Seen in this context, the Stock market mega scan involving reputed Banks and financial institutions, closure of Bank of Karad affecting thousands of rural depositors, have certainly shaken the faith of the public regarding the infallibility of the Banking system. Urgent proactive steps are called for to restore public confidence. A comprehensive all encompassing security system taking care of : physical security of the premises of Banks; personal safety of employees and clients on the premises; safety of cash and valuables in the Bank premises and while in transit; personnel security measures to weed out undesirable elements from getting into the system; computer security and a vibrant vigilant organisation, is called for. The emphasis should be on proactivity and prevention.

To achieve these, as a first step, as in the United States of America, Government of India should enact a Bank Security Act. This Act would make it obligatory on the Banks to undertake certain essential steps to ensure security. These would become an integral part of Bank’s management function.

Rapid expansion of Branches have made location of Banks in premises which are unsatisfactory from security point of view. Preoccupation of police with law and order problems including Terrorism has made it impossible for the Police to devote more attention to the physical security of Banks. Most of the Banks have no access control system, physical arrangements like Barriers, Closed Circuit T.V., Alarm System to prevent a crime and to summon police help. The solitary chowkidar found in many Banks is ill-trained and ill-equipped and is generally utilised as a handy all purpose help and is seldom able to concentrate on security functions, which are his primary duties. Armoured vehicles are not available to transport cash and valuables between Banks.

Hundreds of crores are lost every year in Bank frauds, which are not possible without the connivance and collusion of some of the Bank employees. Neither and Central Bureau of Investigation nor the State Crime Branches have the time or the resources to pursue all these cases. It is essential to prevent criminally inclined personnel from getting into the system. Personnel security in the form of Pre-induction Psychological Screening, criminal background checks, fidelity guarantee bonds, loss insurance etc. would ensure this.

Extensive use of computers, automatic tellers etc. would create opportunities for computer related crime in Banks, which is widely prevalent in affluent countries. Computer security would provide safeguards to minimise incidence of this type of crime.

Vigilance organisation in a Bank has an important role to play in detecting malfeasance and misfeasance in the system. The existing vigilance organisations in the Banks are to be reactivated and rejuvenated. Reserve Bank of India should give a lead by establishing standards and goals for the vigilance organisations in the Banks.

Prompt detection of crime and punishment of the guilty will have a salutary effect on the system. To ensure this, all Bank crimes are to be brought under the purview of Central Bureau of Investigation which should establish a separate Division for Bank crimes at Bombay. This division should work in close cooperation of the Security and Vigilance Directorates of the Reserve Bank of India.