India Inc lost 4 per cent of turnover to bribery
Nearly two-thirds of companies say corruption increases price for customer.
Mumbai: Indian firms have lost on an average four per cent of their turnover to bribery and corruption, highest percentage across all regions globally according to a report on financial crime released by Thomson Reuters.
This is significantly higher when compared to three per cent in Asia-pacific and 3.2 per cent globally.
Out of 120 companies from India that participated in the global survey, around 63 per cent believe that the consequences of this bribery and corruption would be higher prices for end-users and lesser revenue to the government.
When asked whether their companies had been victims of any of the identified financial crimes throughout their global operations during the past twelve months preceding the survey, 53 per cent in India admitted to have suffered a financial crime despite spending about 3.6 per cent of their turnover to prevent such crimes in their global operations.
This is when compared to 47 per cent across the globe and 49 per cent in the Asia-Pacific.
Interestingly, bribery, corruption and cybercrime stood out across all regions as an important issue to tackle. Even though companies in India are spending proportionately more than their global counterparts in the fight against financial crime, they nonetheless lose a higher percentage of global turnovers to bribery and corruption, the report highlighted.
“Financial crime is not a faceless crime, the most vulnerable in our society are preyed on and exploited by organised crime for profit. Financial institutions are carrying the financial burden collectively spending billions trying to prevent money laundering and the proceeds of illicit activity. Year on year they are seeing greater amounts disappear from their business as result,” said Julia Walker, head of risk, APAC, Thomson Reuters.
The survey noted that organisations are operating against a backdrop of growing pressure like the pressure to increase turn-over, grow profits, develop new markets, increase market share and improve regulatory safeguards. These, according to many, are often leading to compliance failure at various levels. Globally 83 per cent reported that pressure to increase turnover in the twelve months post-survey is expected to be either extreme or significant.
This sentiment was echoed throughout the region, with 85 per cent in Asia-Pacific and 87 per cent in India expressing the same sentiment.
63 per cent believe that the consequences of this bribery and corruption would be higher prices for end-users and lesser revenue to the government.
53 per cent in India admitted to have suffered a financial crime despite spending about 3.6 per cent of their turnover to prevent such crimes in their global operations.
83 per cent companies globally reported that pressure to increase turnover in the twelve months post-survey is expected to be either extreme or significant.