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"An honest man is the
noblest work of God", wrote Alexander Pope. Honest people have always been rare. What
makes a person honest? As I see it, there are three factors that decide
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alt="zakaria.gif (8920 bytes)" align="left" hspace="4" vspace="4" width="79" height="94">NVittal is the Central Vigilance Commissioner, Government of India |
whether a person will be honest
or not. The first, of course, is to follow the Pope’s model–the noblest creation
by God. People are inherently honest because of their upbringing, background, and values,
especially derived from religion, parents and peers. So the first factor for honesty is
the inherent value cherished by the individual.
The second factor that affects
the level of honesty is the general framework of values adhered to by the society an
individual lives in. There are societies, which are more honest than our own. For
instance, if we went to Singapore or Japan and left some valuables in a public place,
there are more than even chances that they would not be lifted by anyone. There have been
cases of taxi drivers returning valuables like wallets, jewellery and cash to passengers
by making special efforts to trace them back.
The level of honesty in a society
varies from place to place. To decide the level of honesty in a society, we have recently
got new parameters. Transparency International, a German NGO, collates perception and
comes out with a corruption perception index. India ranks 66 in a list of 85 countries in
this corruption perception index. This means that there are 65 countries, which are
perceived to be less corrupt and 19 which are more corrupt than India. There is a Tamil
proverb that says that in a nudist colony, the person who wears a loin-cloth is a mad man.
So social values are another factor that decides the level of honesty of an individual and
the correspondingly level of honesty of the society itself.
That brings us to the third
factor. This depends upon purely on the external factors like law enforcing agencies and
authorities. The degree of corruption, for example in a country like India, will also
depend on the effectiveness of agencies like the police, CBI, the courts, and CVC
connected with checking corruption. In short, individual values, social values, and
effectiveness of anti-corruption agencies decide the level of honesty in a society.
If this is the basic dynamics of
honesty in a society, what will be the impact on the level of honesty of a technology like
the IT which is leading us to a digital economy and which is converting all societies to
networked societies? A connected or a networked society means a society that has been
connected by computer networks symbolized by the Internet. The economies of these
networked societies are changing. Cyberspace and e-commerce are also bringing in their
train new opportunities for crimes. Oscar Wilde said, "the thief was the artist and
the policeman was only a critic". There are always crooked minds in every society.
They will exist even in a networked society and they will commit cyber crimes.
The issue before us is–is a
networked or connected society more honest?
One answer can be that a
connected society will more or less continue to maintain the same level of honesty as a
non-connected society. Also, there is a possibility that if special care is not taken, a
connected society may become even more dishonest. At the same time, the same technology
can be used to make the society more honest. Let us examine the issues in some detail.
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basically user-friendly. The world is becoming a global village and globalization in
business has become a reality. There are also other developments (for example the WTO)
which are further giving a boost to global trade. In the highly competitive global market,
the world has become borderless as pointed out by Kenichi Omhae the management guru, also
the author of the famous book "The Borderless World" and also advisor to many
governments. The success is dependent upon time. The connectivity, provided by the
computer network, has been found very useful. Technologies like the EDI and Internet have
helped to conduct business more competently and with greater speed than in the past. It is
not business alone that is affected in a connected society; the whole culture and way of
life are also affected. Thanks to globalization with satellite broadcasts, fashion trends
like jeans or music like the Western pop are becoming commonly cherished all over the
world. There is a certain degree of uniformity evolving in different countries. Those who
are particular about ethnic identities are already worrying about this development.
A connected society has two
contradictory features, which are simultaneously observed. On one hand, there is a general
complaint that individuals are losing their privacy due to the Internet and excessive use
of computer networks and technologies like credit cards. Recently, The Economist came up
with an article, which said that perhaps people would willingly sacrifice their privacy
because of the convenience offered by the Internet. From one perspective, the lack of
privacy itself can be an indirect boost for greater honesty. In rural areas there is
probably greater honesty in the society than in urban areas. This is primarily because the
rural communities are small. Everybody knows everybody else and it is difficult to be
dishonest. In urban areas, on the other hand, people are faceless. You probably don’t
know even your neighbour. Hence, it is possible to be dishonest and carry on. If a
connected society reduces privacy, we can make a logical case–that, therefore, it
should increase the level of honesty.
But there is another equally true
feature of a connected society, which is totally opposed to this trend. This is the
anonymity that is provided in the computer network. As the dog observed in the cartoon
about the Internet: Nobody knows in the Internet that you are a dog. Identity of persons
can be easily camouflaged. New types of cyber crimes including vicious acts by child
molesters, etc., are being reported. The anonymity that a network provides can also give a
boost to more dishonest activities.
That brings us to the proper use
of technology for improving the level of honesty in society. I would argue that perhaps a
connected society, and particularly the IT that is the driving force in such a society,
can be utilized for providing greater honesty in the society. Take for example, the case
of banks. The Harshad Mehta scam took place because the 15 days flow available in the
public debt office of the RBI was not computerized. After the event that office was
computerized. As CVC, I have directed that all the banks should computerize at least 70
percent of their business by 1 January 2001. This is the route to not only check but also
to detect frauds quickly. To the extent the frauds can be detected quickly and prevented,
there will be definitely greater level of honesty in the banking system. To be specific,
following factors would help the IT to check and detect the frauds quickly in the banking
sector.
Bank frauds can be broadly
classified as (a) frauds in non-credit areas and (b) frauds in credit areas. The common
frauds in the non-credit areas are those related to fraudulent encashment of cheques,
withdrawal slips, refund orders, demand drafts, bankers cheques, misappropriation as also
fraudulent transactions in the books of branches put through by the bank’s own staff.
Existing computerized system, and upgradation thereof, will help in prevention and early
detection of frauds. This will save bank’s precious funds as well as protect the
long-term interest of bank employees who unwittingly become prey to the design of
unscrupulous elements. Following are the areas where full-fledged computerization will
have salutary effect in prevention and early detection of frauds.
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signatures occur because the passing officials do not find it convenient to verify the
signature stored in signature card cabinets requiring manual location of the signature. If
specimen signatures are captured in the computer, it will facilitate easy verification and
provides security against tampering.
from account holders with regard to lost cheques can be put in computer so that a caution
signal would be available whenever a lost cheque is presented for payment.
casting of wrong balance, and making wrong credit entries can be either prevented or
detected promptly because the computerization would enable tallying/balancing of books on
daily basis.
drafts issued and paid through computerized system would help early detection of
fraudulent payments.
be minimized through prompt reconciliation of the number and amount of cheques through
computerized system.
frauds by raising fake credits through inter-branch accounts may be thwarted through
computerized system for reconciliation of entries between originating branches and
responding branches.
frauds relating to misappropriation of cash receipts by cash department staff can be
prevented or early detected.
lost/fake demand drafts presented by fraudulent means. Computerization and continuous
updating of data related to stolen/lost drafts on the system can help in reducing this.
Officer’s signatures captured in the computer can be used to verify whether or not
the concerned officer has signed the demand drafts.
and Electronic Clearance System has been introduced at metro centres to take care of
corporate clients. The service branch or the main branch does the work of intermediary
between the local branches of the bank and the clearing-house. Lack of proper
reconciliation of number and amount of cheques sent by branches to the service branch/main
branch and vice versa on a daily basis has facilitated perpetration of massive fraud. A
software system for daily reconciliation, if introduced, can be used to avert/detect such
frauds.
would help banks if computerized data base of parties enjoying credit facilities from
different banks in the same centre is available to avoid double financing. It will also
help in knowing the state of affairs of the existing account, and to ensure that the same
persons do not enjoy facilities under different names or firm.
defaulters with photographs of the proprietors/partners/directors, etc., will help the
banking system.
transactions in corporate accounts, remittances, clearances of instruments, payment of
dividend warrants, interest warrants, refunds orders and reconciliation thereof, etc.,
will enhance customer service and help prevent frauds.
What is true of banks can be
equally true in other areas like the police. In the academic institutions where we want to
check cheating in the examinations or for that matter in normal trade and business where
shoplifting is an occupational hazard, one can use IT to monitor and make the life of the
dishonest people like cheats and thieves more difficult.
Ultimately, it depends on us to make our society
more honest by using the IT in a connected society. The other option—making society
more dishonest—is also available. The choice is ultimately left to us. I hope, as it
matures, a connected society will become more honest because ultimately honesty is the
best policy, not only in business but in life also.