The Bumiputra-Commerce Bank (BCB) has refuted claims of fraud arising from its operations, as claimed in a police report lodged by a National Union of Bank Employees (NUBE) official last Saturday.

The bank was responding to a Sunday Mail article over the weekend, based on the contents of the police report which claimed that fraud was committed in its outsourcing subsidiary, EPIC-I Sdn Bhd.

A contract worker hired by the EPIC-I had allegedly transferred RM120,000 to the accounts of his wife, sister and a friend late last year. However, the company has denied any involvement of its "staff".

In a statement, BCB said it viewed "such allegations seriously". It further denied additional allegations that it had contravened the Banking and Financial Institutions Act (Bafia).

It also declared that it would "not tolerate any further malicious acts by any persons such as the dissemination of defamatory information and sensational material".

The Sunday Mail front-paged the police report - lodged by NUBE deputy president Abdul Zaman Abduallh - who claimed that BCB had contravened banking laws by contracting out some of its key functions that led to several fraud cases, including the alleged embezzlement of RM120,000.

Eight BCB directors were named in the report lodged in Kuala Lumpur.

The paper quoted Abdul Zaman as claiming that BCB, by outsourcing its backroom operations to Epic-I, had breached several Bafia provisions.

Guidelines followed

Contacted for clarification, BCB communications vice-president Joyce Ha said the bank had instituted full-time daily auditing to avoid any discrepancies and to maintain customer confidence and confidentiality.

She said BCB had put in place procedures and processes that are "subject to regular and stringent audit by relevant authorities". It has also followed Bank Negara guidelines on outsourcing of banking operations.

"The truth is that EPIC-I does not deal with any cash collection. It only does cheque processing which, according to our lawyers, is not in breach of the Banking and Financial Institutions Act (Bafia)," she said.

"We also have a confidentiality agreement with EPIC-I."

She said any fraud in banks was not caused by banking operations, but was more a question of dishonesty.

"On our part, we have ensured that all security procedures are in place to enable us to track down possible anomalies in any transaction," she added.

NUBE warned

BCB also warned NUBE against continuing with "vandalism and other mischievous acts", with reference to the ongoing trade dispute involving leafleting, posters, stickers and protest badges worn by members.

Over the last two months, too, the union had parked a van with a loudspeaker outside BCB branches to broadcast the bank's alleged banking irregularities. While this has stopped, the union continues to encourage members to display protest badges.

Questioning NUBE's motives in raising a ruckus now, Ha asked why the union did not voice its objections earlier when it was consulted on BCB's outsourcing plans.

NUBE's has repeatedly raised concerns over outsourcing of non-core banking operations, citing the risk of compromising customer confidentiality leading to fraud.

The move to outsource such operations was implemented soon after the 2001 policy on bank mergers came into force.