Financial Crime World

White Collar Crime on the Rise in India: Definition, Causes, and Examples

A Growing Concern for Businesses and Individuals

New Delhi, December 18th, 2023 - White collar crime has become a major concern in India with cases of bank fraud, tax evasion, embezzlement, bribery, and money laundering on the rise. But what exactly is white collar crime? And how can it be prevented?

What is White Collar Crime?

White collar crime is an illegal act committed by a person of higher socio-economic status during the course of their profession or occupational activities. The causes of white collar crimes are varied, but some of the key factors include greed, lack of awareness among people, and loopholes in the legal structure.

Types of White Collar Crimes

In India, some of the most common types of white collar crimes include:

  • Bank Fraud: This is when a person illegally withdraws money or assets by falsely representing themselves in front of the bank. It is punishable under Section 403, 405, 415 etc. of the Indian Penal Code, 1860.
  • Tax Evasion: This is a crime where one person changes their financial situation to avoid applying tax. It can be done by a company, individual or trusts and is punishable under the Income Tax Act, 1961.
  • Embezzlement: This is an act where a person who is entrusted with money uses it for unintended purposes and is punishable under Section 403 of the Indian Penal Code, 1860.
  • Bribery: This is when one person gives money or kind to get a certain job done for them.
  • Money Laundering: This is the process by which a person converts their illegal money into legal money hiding it in plain sight.

Laws Enacted to Curb White Collar Crime

The Indian government has enacted several laws to curb white collar crime, including:

  • The Companies Act 1960
  • The Income Tax Act 1961
  • The Indian Penal Code 1860
  • The Prevention of Corruption Act 1988
  • The Prevention of Money Laundering Act 2002
  • The Special Court Act 1992

Preventing White Collar Crime

To prevent white collar crime, individuals and businesses must be aware of the laws and regulations that govern financial transactions. They must also take steps to ensure that their financial dealings are transparent and above board.

Some measures that can be taken include:

  • Conducting thorough background checks on employees and partners.
  • Implementing robust internal controls and accounting systems.
  • Providing regular training for employees on ethics and compliance.
  • Encouraging a culture of transparency and accountability within the organization.