HR Manager defrauds Deutsche Bank

Saw an article in the DNA today about an Assistant HR manager of Deutsche Bank, Gautam Deepak Baan, who was arrested by the Economic Offences Wing (EOW) of the Mumbai crime branch for allegedly defrauding the bank of Rs. 1.63 crores. A 28 year old guy, he drew a salary of Rs.10 lakh a year and enjoyed living it up, with two cars (including a Skoda) and two flats in Mumbai.

He used to handle the suspense account of the bank, where money was transferred before being credited to employees’ salary accounts. Apparently, when employees left Deutsche Bank, their salary accounts were not closed and Baan used to transfer the money from the suspense account to these salary accounts and then to his own account. The fraud was unearthed when he tried to close the account of an employee who had quit a year ago, and the bank got suspicious since the closure request did not come from the employee.

If these facts are indeed correct, the whole situation is so ludicrous that it’s not even funny.

• Firstly, even after employees had quit, how was Deutsche Bank accounting for the monies paid out month after month? Weren’t the accounting/finance guys keeping tabs on the breakup of funds or even the full and final settlements paid out to such employees?

• What happened to the reconciliation of Profession Tax / Provident Fund / Income Tax and other statutory payments made every month?

• Nowadays, most banks allow companies to directly credit salary into employee accounts. There are a minimum of two persons needed for this; one uploads the salary data as a .csv file using a digital signature, and the other person authorises the transaction, again with a digital signature. Payment of salary is a serious issue and I can’t understand how Deutsche Bank could have entrusted a single individual with this task and that too with no check on him.

I also cannot understand how Baan was able to transfer funds from these ex-employees’ accounts to his own. Just because someone quits a job doesn’t mean they hand over control of their accounts to their ex-employer. At most, it gets converted from a zero balance salary account to a minimum balance savings account, unless the ex-employee voluntarily decides to close the account.

It is difficult to imagine an organisation like Deutsche Bank laying themselves open to such frauds, and speaks volumes about the checks and balances being maintained, or lack thereof.