Prevent ATM thieves and cyber crimes on the rise

Banks to arm machines with ink bombs to stain stolen notes

PETALING JAYA: Thieves who rob automated teller machines will be left with worthless pieces of paper if a Bank Negara proposal is put into place. Dye bombs are to be placed in the ATMs and if anyone tampers with the machines, the “bomb” goes off, leaving the notes stained in red and easily recognisable as stolen money.

Bank Negara, in its guidelines on Dye-Stained Banknotes dated Aug 26, is calling on both banks and Cash in Transit Companies to consider using the currency protection device (CPD) to deter ATM theft.

Local security company Extro Code Sdn Bhd demonstrated yesterday a CPD or dye pack which is already available in the market.

Its technical director Mohd Zaki Sulaiman said that once installed, the dye pack would be triggered when someone tries to break into the ATM.

“The device is like a smoke bomb which releases the ink onto the stacks of banknotes in the ATM,” he said.

Mohd Zaki said there’s no actual explosion but there is some heat when the CPD is triggered.“The actual triggering mechanism is a trade secret,” he added.

He said the ink called Disperse Red 9 was not harmful. He said the ink was imported but the actual CPD was developed and produced locally.

Mohd Zaki declined to reveal the cost of each dye pack and the installation cost. “Who pays for the device will depend on Bank Negara and the banks,” he said.

He said there are four ATM providers in the country but installing the dye-packs in the different machines should not be a problem.

The Bank Negara guidelines state that the CPD would emit a bright coloured dye by smoke, liquid or any other agent to stain the currency in the event ATMs are broken into.

This will enable authorities and the public to easily identify the defaced stolen currency and render them unfit for use.

The guidelines also sets out conditions under which these banknotes will be replaced. Among them:

• > The ink has to be indelible by water, fuel, gas, bleach and detergent.
• > It must be traceable to the ATM, to assist police investigations.
• > It must stain at least 10% of each bank note.
• > It can be detected and rejected by banknotes authentication machines used by banks such as Cash 

Deposit Machines. >It must be non-hazardous and non-toxic.

If banks retrieved the dye-stained currency, they can submit the banknotes to the central bank for assessment.
Tellers will also be trained to detect these banknotes.

The public and retailers will be advised not to accept dye-stained banknotes as they are likely to be stolen.

These measure, Bank Negara believes, will reduce ATM robberies.

In the United States, banks have dye bombs in vaults and any unauthorised person who tries to remove any money will trigger the bomb, leaving all the money – and the robber – stained in ink.

- Contributed by NEVILLE SPYKERMAN  neville@thestar.com.my

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Cyber crimes on the rise - millions of ringgit being lost annually to scams

 

Public awareness: (From left) Ambank deputy managing director Datuk Mohamed Azmi Mahmood, Khalid and AmIslamic Bank Berhad CEO Datuk Mahdi Morad at the launch of the Scam Alert campaign in Bukit Aman 

KUALA LUMPUR: Fraud and cyber crimes in the country have risen unchecked due to the lack of public awareness, while victims are hesitant to report the crime, the police said.

Millions of ringgit have been lost annually to crimes like sms scams and parcel scams, which have mostly gone unnoticed in the public eye.

In a bid to stop such crimes, the police has launched an awareness initiative on the various types of scams in the country.

Inspector-General of Police Tan Sri Khalid Abu Bakar said the initiative, under the National Blue Ocean Strategy, comprised cooperation with the Association of Banks in Malaysia (ABM) and the Association of Islamic Banking Institutions Malaysia (AIBIM).

The public would be informed and educated on the different types of fraud and cyber crime scams being used by today’s criminals.

“We are posting a list of the various methods and modus operandi used in these scams at our official police website at www.rmp.gov.my.

“This will be linked to the websites of all banks in the country so that anyone can easily access the information which will be regularly updated,” he said after launching the initiative at Bukit Aman yesterday.

Khalid said RM98.6mil in losses was recorded last year in cases involving cyber crimes, including Internet banking fraud as well as sms and parcel scams.

“So far this year, such losses have reached RM80.7mil, which shows that such cases and losses are increasing,” he said.

He added that losses to sms scams had jumped from RM5.8mil last year to RM39.2mil so far this year.

- The Star/Asia News Network

Serious deficits that cannot be financed could lead to bigger global crisis!

A bigger global crisis possible

GEORGE TOWN: A global financial crisis bigger than the one in 2008 is conceivable in five to 10 years.

Value Partners Group chairman and co-investment officer Cheah Cheng Hye said the crisis, which would not be V-shaped in nature, would bring about capital flights, volatile markets, rising inflation and social unrest.

“The global financial crisis would have to do with the very serious deficits that cannot be financed.

Developed and developing countries have over the years accumulated such deficits by making promises that cannot be realised in order to get re-elected.

“These deficits would sow the seeds of future social and political unrest,” he said at a public lecture entitled From Journalist to Fund Manager, which was officiated by Penang Chief Minister Lim Guan Eng.

Also present was Penang Institute chief executive officer Zairil Khir Johari.

On Malaysia, Cheah said Value Partners was not bullish about the country.

“Malaysia’s Government and household debts are higher than those in Indonesia, China and Thailand. Half of the country’s government bonds are held by foreigners, who would be the first to run in a crisis.

“The Malaysian workforce is now less productive than the workforce in Thailand and the Philippines. Malaysia is also importing more oil than selling it,” he said.

On making investments, Cheah advised investors to have well-diversified portfolios.

“They should have investments in gold, real estate and a high level of cash of at least 25% of their savings to prepare for future uncertainties,” he said.

Cheah attributes his success to being at the right place at the right time more than the decisions he chose to undertake.

Born in Penang, Cheah, 59, has been dubbed the “Warren Buffett of the East” by the media in Hong Kong.

A Penang Free School boy, Cheah had worked as a journalist in The Star in the early 1970s.

- Contributed by DAVID TAN  davidtan@thestar.com.my

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Worries over systemic risks of shadow banking and mid-tier banks

Analysts have been warning on the risks of China’s “shadow banking” system – a sector estimated to have as much as RM4.15tril in assets. 

RAMADAN is always a good time for reflection.

This year, I’ve been researching a new TV documentary series, Ceritalah Indonesia, that I’m hoping to shoot by September.

I want to tell the story of how Indonesia, having endured the Asian Financial Crisis in 1997/1998, ousted President Suharto and then launched into the tumultuous “Reformasi Era” before finding some degree of stability under President Susilo Bambang Yudhoyono.

As a result, I’ve been going over recent history – including the roots of the crisis itself.

Now even though I’m not an economist, it’s been a very interesting journey, especially reading about the various bank failures that sparked off and then deepened the crisis.

Back then, banks seemed to be falling like dominoes: Thailand’s Finance One collapsed spectacularly.

This was followed only a few months later by Bank Indonesia’s surprise decision to close sixteen banks.

As the momentum gathered in intensity, one of Japan’s most important brokerage houses – Sanyo Securities was also shuttered.

Just over a decade later, a similar sequence of events was to take place in Europe and North America as Northern Rock, Iceland’s Landsbanki (better known by its British brand-name Icesave) and Lehman Brothers also failed, leaving in their wake a massive dislocation across the developed world.

Now, as I reflect on the events of 1998 and 2008, I can’t help but sense a similar trend emerging to our north – in China.

Indeed, the next global economic crisis could very well start there. Why?

Well, have you visited the many ghostly, almost totally-empty high-rise communities that have sprung up across the Middle Kingdom?

I can still recall wandering through vast and deserted business quarters in Dalian, Tianjin and Beijing.

At the time, everyone told me that China was different ... well that’s what they said about Thailand, Iceland and Spain.

But now after years of over-building: roads, bridges and railway lines, expanding capacity to the highest degree, people are beginning to question China’s growth model.

For many months now, analysts have been warning on the risks of China’s “shadow banking” system – a sector which some estimate to have as much as US$1.3tril (RM4.15tril) in assets.

“Shadow banking”– is simply non-bank lending and borrowing. Investing in hedge funds, venture capital and private equity are all forms of “shadow banking”.

There’s nothing wrong with this: shadow banking often helps individuals or businesses that would otherwise not qualify for conventional bank loans or get credit.

Also, some shadow banking wealth management products offer lucrative returns.

Shadow banking thrived in China with the liquidity that flooded the market in 2008, when its government pumped in a US$586bil (RM1,828bil) stimulus package in response to the subprime crisis.

All this excess liquidity has, however, causing a housing bubble and also saved a number of underperforming Chinese state-owned enterprises from having to reform.

At the same time, Chinese policymakers were debating long-standing calls for them to cool down their economy – a fateful decision as we will see later.

As the astute Henny Sender wrote in the Financial Times on July 11, the investment products which form the backbone of Chinese “shadow banking” have the potential to create yet another subprime crisis.

Why? Well, many of China’s hedge funds are shorting the shares of China’s weaker banks. Does that sound familiar?

According to Sender: “… second-tier banks listed in Hong Kong or in mainland China, including China Merchants, China Minsheng Banking and tiny Huaxia, are vulnerable” as they “… have less ability to absorb losses and more of their balance sheets are tied up with shadow-like activities.”

Minsheng, founded in 1996, is China’s ninth-largest bank by assets and the only private bank amongst its top 10 commercial lenders.

It also, according to JP Morgan, has the fastest growth in inter-bank assets and the highest weighting of interbank liabilities to total interest bearing liabilities.

As mentioned, China’s government was initially determined to “cool” its economy.

The People’s Bank of China (PBOC) hence refused to intervene when the Shanghai interbank offered rate (“Shibor”, China’s LIBOR) spiked to an all-time high, to almost 14% from 3% previously.

This led to fears that the sudden “credit crunch” would leave banks like Minsheng at risk of default, the very thing that caused the collapse of Western banks like Lehman in 2008 due to a sudden lack of liquidity.

Indeed, in late June worried investors sent Minsheng’s shares down by 16.7%, wiping out US$6bil (RM18.7bil) of its market value.

Talk of a crisis forced the PBOC to promise to end the credit crunch.

Still, worries over China’s shadow banking system persist.

As Fitch Ratings has stressed, systemic risk over China’s mid-tier banks is rising due to their credit exposure and weakness in absorbing losses.

It remains to be seen whether banks like Minsheng will indeed become China’s Lehman.

But this much is clear: those who ignore history are doomed to repeat it.

Ceritalah  By KARIM RASLAN

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