FinCEN identified the following red flag indicators to help financial institutions detect, prevent, and report potential suspicious activity related to the use of GenAI tools for illicit purposes.
Source: Deep Fake Indicators by FinCen (FIN-2024-Alert004, November 13, 2024)
https://www.fincen.gov/sites/default/files/shared/FinCEN-Alert-DeepFakes-Alert508FINAL.pdf
- Default in payment to the banks/sundry debtors and other statutory bodies, etc., bouncing of the high value cheques
- Raid by Income tax/sales tax/central excise duty officials
- Frequent change in the scope of the project to be undertaken by the borrower
- Under insured or over insured inventory
- Invoices devoid of TAN and other details
- Dispute on title of the collateral securities
- Costing of the project which is in wide variance with standard cost of installation of the project
- Funds coming from other banks to liquidate the outstanding loan amount
- Foreign bills remaining outstanding for a long time and tendency for bills to remain overdue
- Onerous clause in issue of BG/LC/standby letters of credit
- In merchanting trade, import leg not revealed to the bank
- Request received from the borrower to postpone the inspection of the godown for flimsy reasons
- Delay observed in payment of outstanding dues
- Financing the unit far away from the branch
- Claims not acknowledged as debt high
- Frequent invocation of BGs and devolvement of LCs
- Funding of the interest by sanctioning additional facilities
- Same collateral charged to a number of lenders
- Concealment of certain vital documents like master agreement, insurance coverage
- Floating front/associate companies by investing borrowed money
- Reduction in the stake of promoter/director
- Resignation of the key personnel and frequent changes in the management
- Substantial increase in unbilled revenue year after yea
- Large number of transactions with inter-connected companies and large outstanding from such companies
- Significant movements in inventory, disproportionately higher than the growth in turnover
- Significant movements in receivables, disproportionately higher than the growth in turnover and/or increase in ageing of the receivables
RBI’s list of few Early Warning Signals
- Disproportionate increase in other current assets
- Significant increase in working capital borrowing as percentage of turn- over
- Critical issues highlighted in the stock audit report
- Increase in Fixed Assets, without a corresponding increase in turnover (when the project is implemented)
- Increase in borrowings despite huge cash and cash equivalents in the borrower’s balance sheet
- Liabilities appearing in the ROC search report are not reported by the borrower in its annual report
- Substantial related party transactions
- Material discrepancies in the annual report
- Significant inconsistencies within the annual report (between various sections)
- Poor disclosure of materially adverse information and no qualification by the statutory auditors
- Frequent change in the accounting period and/or accounting policies
- Frequent requests for general-purpose loans
- Movement of an account from one bank to another
- Frequent ad hoc sanctions
- Not routing of sales proceeds through the bank
- LCs issued for local trade/related party transactions
- High-value RTGS payment to unrelated parties
- Heavy cash withdrawal in loan accounts
- Non-submission of original bills
List of Suspicious Loan Apps running campaigns through Facebook Advertisement :
An early warning mechanism to warn the public to invest time and money in MLM frauds listed on the SCAM ALERT list
(https://www.strategyindia.com/blog/scam-alerts/ ) the Strategy India website.
