The Bhutanese Leading the way.
The Anti Corruption Commission (ACC) is currently investigating a case in the Wamrong branch of Bhutan Development Bank Limited (BDBL) where a Credit Assistant used the Point of Source (POS) machine meant for taking banking to farmers to instead transfer money to his account and then use it for online gambling.
A source said that the Credit Assistant’s modus operandi was to use the POS machine after office hours late at night and then use it to deposit money into his account.
He did this between February 2021 and April 2021 managing to transfer Nu 6.3 mn to his BDBL account.
The Credit Assistant, Pema Dorji, then transferred this amount from his account to his Bank of Bhutan account.
It was from this BoB account that he made his online gambling payments.
Pema was apparently part of an online WeChat gambling group where he gambled away Nu 6.3 mn of BDBL’s money within three months.
One key part of the scheme was that Pema did not use any depositors’ money but he actually misused the POS machine to make digital deposits into his account late at night when nobody is there in the office to check for such transactions.
Pema also did not put in large amounts at once but a few hundred thousand at a time so that it would go unnoticed.
The embezzlement came to light when the Wamrong branch manager noticed Pema was part of some gambling WeChat groups.
An internal audit was done by a team sent from Thimphu followed by a police case which was forwarded to the ACC.
The Credit Assistant is understood to have confessed to his illegal deposits and withdrawals and his online gambling in a written statement.
He managed to refund some money but the BDBL branch is still short by Nu 5.7 mn.
A source said that the POS machines had been introduced in BDBL branches from July 2020 with aim of Farmers Outreach Banking or FOB whereby farmers in remote areas did not have to come to the branch but branch officials would go to them and provide them services like deposit, loan payments and credit sensitization.
In the earlier system if a farmer made a deposit a paper receipt was issued with one copy with the office and so fraud was not as easy.
However, the entry of POS machines that updated bank accounts from the field itself opened the potential for such fraud.
One of the issues in the ACC investigation is the lack of a proper Standard Operating Procedures to handle such machines as the credit assistant had been keeping the machine at home where he made the transactions after office hours.
When the Wamrong issued came to light under the internal audit of BDBL a source said that something similar had happened in Rangjung BDBL branch too but the money was refunded.
BDBL over the last few years has been hit by a series of fraud cases. One was in Tsirang caught in 2019 when two female tellers had embezzled Nu 17 mn by creating a fake desktop screen not linked to the system when people came to deposit money.
In 2018 an ACC investigation found that the Assistant Branch Manager of Bhutan Development Bank Limited branch in Pemagatshel, embezzled around Nu 11.76 mn from the both the Gelephu and Pemagatshel branches by taking loans in the name of unsuspecting clients.
Another ACC investigation in 2017 found that the BDBL project officer in Thimphu, Pema Nidup gave up to Nu 576 mn in unauthorized loan enhancements.
In Paro BDBL a credit assistant misused the loan documents to avail credit.
In Autsho field office credit repayment of few lakhs was embezzled.
There were similarly fraud and embezzlement committed in in Trashiyangtse branch, Yandi branch, Wamrong (twice including the recent one), Thrimshing field office under Wamrong branch, Lhamoizingkha branch, Panbang branch, Trongsa branch, Bumthang branch, Dagapela branch, Paro branch, Phuentsholing branch, Gomtu field office, and Thimphu Main branch (thrice).
The above show a need for stronger system and better supervision to prevent such banking frauds from happening.
