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Policies and Procedures Anti Fraud Strategy

1. Backgroud

The background of the development of policies and procedures for the implementation antifraud strategy are as follows:

  1. In order to prevent the occurrence of cases of irregularities banking operations, particularly fraud that could harm customers or the Bank, it is necessary to increase the effectiveness of internal control in order to minimize the risk of fraud by applying antifraud strategy.
  2. During this time, either directly or indirectly, the implementation of fraud prevention has been implemented by the Bank, among others through the implementation of risk management and internal control systems in particular the implementation of good governance. However, in order to be effective implementation steps are required in order to increase the fraud prevention really become the focus of attention and the culture in the Bank at all aspects of the organization, both by management and employees.
  3. Effectiveness control fraud in business, in the process are the responsibility of management, so it requires a proper understanding and through about fraud by management, so as to provide direction and grow awareness for risk control Bank. Fraud on anti fraud strategy is a commitment in the Bank's management that is applied in the form of fraud control system. This strategy requires management to Mobilize resources to control fraud system can be implemented Effectively and sustainably
  4. Anti-fraud strategy is a commitment of the Bank's management in controlling fraud that is applied in the form of fraud control system. This strategy requires management to mobilize resources for fraud control system can be implemented in an effective and sustainable.

2. The Purpose

The purpose of the policy and procedures for the implementation of anti fraud are strategy as follows:

  1. As a basic action taken by the Bank to perform enforcement, control and prevention of the occurrence of a crime the which could harm the Bank may Affect the financial and operating performance of the Bank overall. 
  2. As a form of Affirmation of the Bank and to Realize and understand throughly at every level of the organization banks that fraud the forms of crime and unscrupulous actions, especially in the banking organization. 
  3. To provide direction in the Internalization of anti-fraud culture, Increased alertness and awareness raising the risk of fraud on each activity of the Bank.
  4. As a guide in performing acts of fraud control through efforts not only to prevention but also to detect and investigate and improve the system as part of a strategy that is integral in controlling fraud.
  5. To minimize and prevent acts of fraud through: 
  • Implementation of anti-fraud strategy that is integrated.
  • Promote a culture of honesty and ethics.
  • Detecting follow fraudyang not been prevented.
  • Professional investigation to fraud detected.
  • The application of appropriate sanctions.
  • Increasing the level of awareness to  external parties such as the Bank's customers, suppliers and partners of the Bank.
  • Provide training and guidance to employees on an ongoing basis, especially with regard to banking transactions. 
  • Provide protection against the delivery of reporting indications of fraud committed in the Bank. 
  • Improved quality Human Resource Management.

3. Legal Basic

The legal basis for the implementation of antifraud strategy are:

a. Bank Indonesia Circular Letter No. 13/28 / DPNP of Strategy Implementation of Anti Fraud For Commercial Bank.

b. Bank Indonesia Circular Letter No. 13/23 / DPNP on Amendments to the SE 5/21 / DPNP on the Application of Risk Management for Commercial Banks.

c. Banking Law number 7/1992, as amended by Law No. 10/1998.

4. Active Role of the Board of Commissioners and Directors

The active role of the Board of Commissioners and Directors in the implementation of antifraud strategy set as follows:

a. Building a culture and a concern for the anti fraud on throughout the organization, among others, statements and declarations antifraud adequate communication to all levels of the organization about the behavior that included acts of fraud

b. Develop and oversee the implementation of the code of conduct relating to fraud prevention for all levels of the organization

c. Develop and oversee the implementation of anti-fraud strategy as a whole

d. Develop the quality of human resources, especially associated with increased awareness and control of fraud

e. Monitoring and evaluation of incidents of fraud as well as the establishment of a follow-up, and

f. . Develop effective communication channels in internal Bank so that all officials / employees of the Bank to understand and comply with policies and procedures, including policies to control fraud.

5.  Organizational Structure

The Bank has established Organizational Structure antifraud strategy implementation, with the duties and responsibilities of each one tailored to the complexity of the bank transaction.

6. Anti-Fraud Strategy

Anti-Fraud Strategy policies implemented by the application rests on four pillars: Prevention, Detection, Investigation-reporting and sanctions, as well as Monitoring Evaluation and Follow-up.

a.  Prevention

Prevention activities initiated by growing anti-fraud awareness through:

  1. Cultural socialization Anti Fraud committed not only to the Bank's internal but also to external parties associated with the Bank.

  2. Identification Vulnerability (Vulnerability Identification) implemented by the Anti Fraud Officer appointed to carry out the process of identifying potential vulnerability to fraud in units or employees who are responsible.

  3. Implementation of Know Your Employee recruitment through the control system, the process of mutation and rotation of employees and mandatory leave policies (block leave).

  4. Enforcement of the Code of Conduct (Code of Conduct)

  5. Improving the Effectiveness of Supervision

b. Detection

Detection indication of fraud known as the red flag. Indicators fraud-proof is not a conclusion, but the symptoms can direct further investigation may have been a fraud action. Fraud detection strategy including through:

1) Implementation of Whiste Blowing (Violation Complaint)

Whistle Blowing implementation is intended to improve the effectiveness of fraud control systems with emphasis on the disclosure of the complaint. In order for the application of whistle blowing can clearly, easy to understand, and can be implemented effectively to provide encouragement and awareness to employees and officials of the Bank to report fraud that occurs, then set policies and procedures for whistle blowing, by involving all employees in order to deliver a report when knowing their employees or activities that indicate fraud measures (as a whistle blower).

2) Surprise Audit

Surprise Audit Implementation refers to the Audit Policy and is an integral part of the internal audit policy in force.

3) Surveilance System

Surveillance system is an act of testing or examination that is performed without being noticed or realized by the parties to be tested or inspected.Surveillance is one of the investigative techniques that are based on the observation and recording of physical facts, activities and movements, which is supposed to be part of the fraud. Surveillance is a covert operation (undercover operation) the implementation of which requires special expertise, which has a high level of risk to the security of the implementation of the operation, the case being dealt with and vulnerable to a violation of law on the implementation of the surveillance itself. Therefore, considering the types of cases fraud and materiality of the potential losses faced, then if the disclosure of an alleged fraud require surveillance process, the implementation of the surveillance process outsourcing determined using a third party that controls the technical aspects and having the legality of conducting surveillance.     

c. Investigating, Reporting and Sanctions

1) The incidence of Fraud Investigation

Some of the factors to be considered whether the alleged fraud to be investigated or not based on specific criteria. Bank set the Policies and Procedures of Investigation as a reference implementation.

2) Case Management and Reporting

To mitigate the possible loss of both material and immaterial, then after investigations concluded acts of fraud have occurred, then the follow-Fraud Case Handling determined from the results of the investigation, subsequently handled by Team Handling Fraud. The Result  handling of cases reported to the Board of Directors to further taken measures and sanctions.

3) Communication with Stakeholders                

Taking into account the types of events and the level of publicity the case, then the Fraud can Handling Team took the decision to open up to all interested parties.

4) Imposition of Sanctions

The parties authorized the sanctions for perpetrators fraudditetapkan as follows:

a) Board of Commissioners, if the offense involves the Board of Directors of the Bank

b) The Board of Directors, if the offense involves employees of the Bank

In the case of infringement cases are reported to authorities or police the sanctions given refer to the legislation in force.

d. Monitoring, Evaluation and Follow-up

1) Monitoring and Evaluation

The effectiveness of the implementation of fraud strategy always monitored and evaluated, so that any deficiencies in the implementation of the program could be improved, so that the program can be run effectively and efficiently. Each occurrence of fraud used as learning materials (lesson learning) for the organization, so that the work units concerned should evaluate and correct the deficiencies that led to the commission of fraud.

2) Follow-up

Each occurrence of fraud followed up with a remediation process, so that losses can be reduced and the chances of a recurrence can be minimized.

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