Growing white-collar crimes in India


Author: Shreya Saxena, Jamanlal Bajaj School of Legal Studies, Banasthali Vidyapith.

What are the white-collar crimes?

A general definition suggests that the crimes occurring in large and wealthy organizations are called white-collar crimes. People who have a sophisticated and specific understanding of the disciplines of finance, accountancy, management, engineering, and organizational management are usually the first ones in line to commit this kind of offenses. 

These crimes are committed in plain sight. This can be explained with a practical approach towards these people and the sophisticated organizations. People in the organization may not even know of the set-up of a crime happening in front of them. Often, one may not even be aware of the fact that the person working next to him or her or supervising them is involved in white-collar crime and is a part of a scam. 

 Thus, White collar crimes are those crimes that are associated with people who have a recognizable social status. These are distinct in nature from those of the traditional crimes and the reasons for their occurrence are the unethical business practices that are motivated by the very people related to the firms or organizations for the purpose of financial gains.

 It is common knowledge in the present times that certain professional spheres offer lucrative as well as money-spinning opportunities for criminal acts and unscrupulous practices that hardly attract the attention of the common people. It has been observed that these deviants who commit these crimes have consequential regard for honesty and other ethical values. Therefore, they carry on their illegal activities with dispensation as well as without any fear of loss of prestige or position in society. The crimes of this nature are called White Collar Crimes.

what are the causes of white-collar crimes?

There are some commonly found factors or causes, which are responsible for the incidence of white-collar crimes; some may be economical, some social and political and there may be many other reasons. The other problems are globalization and liberalization which are also mainly responsible for the commission of the white-collar crimes. The changing socio-economic scenario of the society in today’s times coupled with an increase in wealth and prosperity of the people has furnished as well as embellished the opportunities for such kind of crimes. It has been practically noticed and observed that out of all the factors, the economic and industrial growth throughout the world has been perhaps the most potent cause of the increase in white-collar crimes in recent years. Commenting on the growing incidence of white-collar crime in India, the Law Commission in its 29th Report observed that modern developments in the fields of science and technology and the latest monopolistic trends in the business world have led to a gigantic increase in white-collar crimes. 

What is the Indian scenario with regard to these crimes?

The post-independence period in India ushered an era of welfare activities which necessitated regulatory measure on the part of the government to control means of production and distribution so as to subserves the common good. The contravention of such regulatory measures generally gives rise to white-collar criminality. There have been assertions that the problem of white-collar criminality has its roots in the competitive business community. Sometimes, such crimes may also be committed simply and purely for the sake of retaining existence in the competitive business. To illustrate this concept, an instance can be presented hereby. There is a prescribed code of ethics for the practicing lawyers in our nation but since the very nature of this profession involves the spirit of combat and competition, the lawyers and advocates often resort to unlawful tactics such as suppression or falsification of facts, which if detected, is punishable under the penal law of the land. One more reason for the multiplicity of white-collar crimes is the relatively high socioeconomic status of white-collar criminals. Their belonging and connections to certain influential groups are powerful enough to handle their occupation tactfully, and the persons affected thereby hardly know that they are being victimized. Moreover, the public in our wide-ranging nation is also fairly apathetic and indifferent towards such crimes which thereby causes an obstruction in the prosecution and punishment of the white-collar criminals.

Recent cases of White Collar Crimes in India 

Like any other country, India is equally in the grip of the white-collar criminality. The reason for this enormous increase in white-collar crimes in recent decades can be found in the fast-developing economy and industrial growth of this nation which belong to the group of the third- world nations. 

The Santhanam Committee Report in its findings gave a thought through a picture of white-collar crimes committed by persons belonging to the higher social strata. It included businessmen, industrialists, contractors, suppliers as well as some corrupt public officials. 

The Reports of the Vivian Bose Commission of Inquiry which looked into the affairs of the Dalmia-Jain group of companies in the year 1963 highlighted that how industrialists indulged themselves in certain white-collar crimes such as forgery, fraud, falsification of accounts, tampering with records for personal gains and tax evasion, etc. 

The recent corruption and fraud cases in India viz. the 2G Spectrum scam, the  Adarsh Society scam, the commonwealth games scam of 2012and various other scams have negatively impacted India’s reputation on the international basis. These infringements are of various kinds, with bribery and corruption making up 83% of these cases. A significant portion of the frauds also relates to cyber crimes and diversion of assets. The sectors most affected are financial services and those of information and entertainment.

The Satyam Scam

Inconceivably one of corporate India’s worst recounting chapters, Mr. B. Ramalinga Raju, Founder and Chairman of the $2-billion Satyam Computer Services, dramatically stepped down after admitting of faking financial figures of the company to the tune of Rs 7,136 crore, including Rs 5,040 crore of non-existent cash and bank balances. “What started as a marginal gap between actual operating profit and the one reflected in the books continued to grow over the years. It has attained unmanageable proportions as the size of the company’s operations grew over the years,” Mr. Raju had explained in an interview.

The PNB Bank case 

Nirav Modi and Mehul Choksi, in collusion with several of the senior as well as junior officials, defrauded the Punjab National Bank of several thousand crores of rupees. These PNB officials fraudulently issued LoUs and LoCs on behalf of quite a few companies belonging to the duo for availing the credit of the buyers from overseas branches of the Indian banks. None of the transactions were routed through the CBS (Core Banking Solution) system, thus avoiding early detection of fraudulent activity, which was going on since 2011. 

In this scam now assumed to be around Rs 13,700 crore, over Rs 450 crore was diverted to around six beneficiary companies based in Hong Kong and UAE in just one month that is July 2014. The amount of money, issued as loans through the LoUs (Letters of Undertaking) or LoCs (Letters of Credit) by Punjab National Bank, was later routed to the shell companies linked to this duo in Hong Kong and Sharjah. The ED has already issued a letter or as in a request sent to a foreign court for judicial to 13 countries (mostly regulated by the United Nations), including Hong Kong and UAE, to seek their cooperation in the investigations that were going to be held. Both Nirav Modi and Mehul Choksi are on the run at the present time. 


The financial loss to our Indian society from these crimes is far superior to those voracious crimes committed by persons of lower socioeconomic status. They violate the trust and create distrust which results in the lowering of social morale and social disorganization to a very large extent. 

One of the most important aspects of white-collar crime is that at times, the members of the community themselves contribute to the commission of various white-collar crimes readily or not. White-collar crime is, therefore, a complex area to gestate and conceptualize. It stands on the sidelines of criminology and poses diagnostic and research problems. India to maintain the growth story of its development needs to reduce fraud and corruption in the government and private sector. The Government must perk up the governance and take stringent actions against such offenders. Also, the private sector must implement measures of prevention of fraud and focus on ethics to curb them. Both sectors have to collaborate to minimize fraud risks in India for the betterment of them and their nation.