The recent Prem and Bhagat story is just another feather in the cap of the series of scams that haunt the Indian business scenario. Big investors like L N Mittal are looking at other favorable destinations owing to deep-rooted corruption in the Indian business ecosystem.
In most blogs, we have emphasized the importance of background checks to wipe out corruption. However, there is one very important element that cannot be neglected and that is Financial Verification . Money laundering, misappropriation of accounts, identity theft and others cannot be tackled by background verifications alone. However, through financial verification money movement can be identified. It involves checking employee financial records such as real estate, bank account statements among others.
Yearly financial audits are conducted in companies but what is brewing within employee accounts is not generally much of a concern. Many financial frauds thereby find their origin from such discrepancies. Employment credit check is a common practice in the west but it is not a very common practice in India except for in the case of loan applications. An employment credit check is a credit report prepared for the employers. It contains current and historical credit payment and balance information. It contains information about any irregularities in the employee’s credit history.
On a deeper thought, why do such bulk money transactions that account for major frauds, go unnoticed at all? Every transaction occurs through proper bank channels or through regulated authorities. Why doesn’t someone raise an alarm when they smell something fishy?
To ensure more transparency in the system, monitoring bank account transactions as well as forex accounts is extremely important. Wrong doers must know that they will be caught. People who are stashing away millions illegally in Swiss accounts and others must know that they cannot get away with it anymore.
In general anybody is wary of disclosing information about their bank statements, property and other assets. In fact even background verification companies cannot very openly enquire about an employees pay slips or bank statements, as it is not deemed ethical. What we have to figure out is, can we allow corruption to meander so deep in the system in the name of ethics?