White Collar Crimes in India



White-collar criminals are usually intellectuals and professionals in their area. Crimes are committed by people belonging to a reputable, high-class society with the ultimate motive to earn more profit or avoid losses during their employment. These crimes include bribery, money laundering, corruption, cybercrime, fraud, tax evasion etc. White-collar crimes have a direct and significant impact on the country's economy. Criminals of this sort often do not hesitate or are afraid of the consequences. Crimes of this class are difficult to recognise and disclose as every step is systematically organised. These crimes are most evident in corporate, trade, medical, governmental, and educational organisations. Although, they are present in almost all sectors of the economy.

The term "white-collar crimes" was first coined by Edwin Sutherland, sociologist and criminologist, in 1939. He was the first to assert that highly reputable individuals also get involved in crimes to assuage their greed. His dissimilar thoughts were met with immense criticism by business leaders and top executive officers as it disintegrated their upper-class identity. It is pretty surprising to see the privileged class committing crimes.


Common types of white-collar crimes in India:

  1. Money Laundering: It disguises illegal money as money obtained from legal means. Here, the criminal tries to hide the original source of money and converts illegal finances as legal ones by creating false transactions from the bank. Money laundering involves a series of steps:

1. Obtaining money through illegal and offensive ways.

2. Creating false accounting statements, transactions, book-keeping.

3. The money is withdrawn from the licit bank account to transfer the money back to the criminal.

Criminals use different techniques to launder their money. The most common ways are through the stock market, fake export data, antique goods purchase and resale.

  1. Bribery: The most common and ignored white-collar crime is bribery that is visible in our day-to-day lives. It is a prevalent practice in India and most evident in public officials. When obtaining favour from a person at a high official position, an offering or endowment is made that is bribery. It may also be done to prevent an officer from doing something that he is supposed to do as a part of his job.

  2. Bank Fraud: Initiation of offence with malafide intention to deceive the other party to obtain advantage is known as fraud. Bank fraud is committed when the trusted client of the banks tries to make false company representation to get loans with no intention to repay or by using other financial instruments to manipulate the banks. This type of crime is often committed due to the privileged relationship between the banks and the customers. Bank frauds are done mainly by well-known businessmen. This offence has terrible bearings on the country's economy and government resources.

  3. Tax Evasion: Concealing the total earnings to evade the liability of paying tax is known as tax evasion. This crime eliminates an individual's moral obligation to pay taxes. It is done to avoid accountability towards the authorities regarding the total revenue earned.

  4. Blackmail: Threatening someone to reveal their secrets, knowing that if the secrets get leaked, it can cause embarrassment or hurt the person's sentiment is blackmailing. It is usually done to take monetary, physical, or psychological advantage of another person powerlessness. It is highly dangerous as it sometimes abates suicide and causes great harm to the individual's identity and reputation in society.

  5. Financial Scams: When individuals are defrauded in the names of lotteries, financial benefits, loan schemes, discount offers and various other ways causing them financial loss are considered as financial scams. These types of schemes often involve advance payment of some amount. People lie about the scheme saying they will get a large sum of money if they "invest" a small amount.

  6. Cybercrime: When people with excellent technical skills hack others' data to use it for their advantage, it is known as cybercrime. In these technologically advanced times, exorbitant cybercrime rates make it extremely difficult to believe in new technology every day.

Reasons for growth of white-collar crimes:

  1. Greed: There is nothing like "too much" for a greedy person. It is impossible to satiate greed. Greed drives people who commit white-collar crimes. A person who already belongs to an elite society often intends to commit such a crime. The reason is quite apparent: they want to get everything. They want to strive for all things without any limits, even if it costs them their reputation.

  2. Rationalisation: Criminals associated with white-collar crimes often do not see themselves as criminals. They have their perception of their acts, and in their opinion, their acts are justifiable. In most cases, offenders do not know that they are involved in criminal acts, and it has bearing on others.

  3. Competition: Darwin's theory of the 'Survival of the Fittest' asserts that there will always be competition among the human race to survive, and the best will survive. In the race of survival, people turn to the criminal world to surpass their peers. The competitive spirit and zeal to stand out as a superior push them into the web of crimes.

  4. Advanced Technology: With the advancement of technology, the rates of crime have also increased. A large amount of data that is available on the internet assists criminal minds. The personal data of millions of people is just one click away. Due to undue care and no precautions, fraud is committed to thousands of people daily. Not only this, but technology also generates thousands of creative ideas in the minds of criminals. Anyone from any corner of the world can obtain data from thousands of miles away and use it to their benefit.

  5. Lack of Job Incentives: The fact that employees are often not incentivised for the hard work they put in often aggravates them to earn benefits themselves. The unethical environment and inhabitation of dishonesty can also be significant factors in the initiation of these crimes.


Effects of the White-collar crimes on various institutions:

  1. Effect on Economy: White-collar crimes are committed to gain substantial financial profit. Due to the very nature of this type of crime, it has terrible consequences on the economy, causing financial loss to the government and the country's exchange system.

  2. Effect on Society: White-collar crimes create uncertainty in society. When the criminal offences of the high-class members of society come to light, it creates disturbance and disharmony. People lose confidence in each other.

  3. Effects on the Company: Crimes committed by a person associated with the company tend to create a negative image of the company in the eyes of customers, shareholders, and investors. Investors and shareholders try to sever their connection with the company to avoid legal procedures. Customers also start looking for alternatives in order to avoid fraud and cheating. The whole act of crime degrades the company's reputation.

  4. Effects on Individuals: Person associated with criminals suffers contempt from society though they have not done anything. Employees lose their jobs when the companies are shut down in the course of the legal procedure. People whom the company defrauds suffer huge losses.


Legislation against the white-collar crimes

The Indian legislature has passed several laws and acts to prevent and impede white-collar crimes. Following are some of the provisions of law:

Relating to money-laundering:

  1. Prevention of Money-Laundering Act, 2002 was enacted to prevent the legalisation of illegal money and empower the government to confiscate the property gained by illegal means.

  2. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

Relating to cybercrimes:

  1. The Information Technology Act, 2000 provides laws and punishments for the crimes due to the illegal use of technology.

  2. There are also similar provisions in the Indian Penal Code to punish crimes relating to technology misuse.

Relating to Corruption:

  1. Prevention of Corruption Act,1998

  2. Central Civil Services (Conduct) Rules, 1964 and All India Services (Conduct) Rules, 1968

  3. Foreign Contribution Regulation Act, 2010

  4. Right to Information Act, 2005

  5. Central Vigilance Commission Act, 2003

  6. Lokpal and Lokayuktas Act, 2013


Relating to Fraud:

  1. Companies Act, 2013

  2. Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003


The obstacle in India is that there is no precise definition of white-collar crimes. Although there are enough provisions of law to punish and prevent white-collar crimes, such crimes are still rising at a frequent pace. Moreover, such crimes often remain unidentified because these crimes are carried out in privacy, leaving no eye-witness. The other major factor is that acts and laws are passed but not executed or appropriately enacted. It is a prerequisite to educate people to refrain from deception. Punishment regarding white-collar crimes should be harsh. Investigative agencies are required to increase their scope of the investigation and closely monitor the activities of the presiding officials. The training and technological aspect should also be put in use while investigating such crimes.

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