Wednesday, June 26, 2013
Bank Officers Arrested in Rs.12 crore Fraud
More arrests likely in bank fraud case: CBI --Times of India
All of them have been charged on serious counts including criminal conspiracy and forgery and the bank officials face additional charge of criminal misconduct by public servants. The accused had allegedly conspired to illegally pre-close and transfer out a Rs 12-crore fixed deposit receipt (FDR) from the Punjab National Bank(PNB) branch in Sankagiri in Salem district to State Bank Of India's (SBI) St Xavier College Palayamkottai branch in 2011. "We sought custody of the six accused as there are chances of more people being involved in the crime. Further details would emerge as we make progress in the investigation," said a CBI official, in charge of the probe.
The sleuths arrested R S Rajakrishnan and L Jayaprakash, senior managers of PNB, Sankagiri, and SBI, Palayamkottai, respectively on Tuesday along with Rajendran, an auditor from Chennai, advocate S S Thirumurthy, B Prabhu, Muthu, Zahir Hussein, Venkatesh, Sakthivel, Sundarapandian Kailasam and Raju Ram alias Sunil.
The CBI has been granted five days custody of Thirumurthy, Venkatesh, Sundarapandian Kailasam, Zahir Hussein, Rajendran and Muthu by the special CBI court here in the city on Wednesday. Another accused, Shahul Hamid, is absconding. B Prabhu and SS Thirumurthy are from Coimbatore and had facilitated in opening the bank account at Palayamkottai to electronically transfer the money.
The initial FIR was registered on November 12, 2012 based on a complaint by T Latha, deputy general manager of PNB, Trichy circle. As per the complaint, Karnataka Industrial Areas Development Board (KIADB), a government of Karnataka undertaking, had deposited two FDRs of Rs 12 crore and Rs 13 crore through PNB's Rajaji Nagar branch in Bangalore with Sankagiri branch on September 14, 2011. The Bangalore branch credited the proceeds amounting to Rs 25 crore to the account of their Sankagiri west branch office within the next three days under a one year reinvestment plan.
However, on October 3, 2011, the Sankagiri branch received a letter demanding them to pre-close the FDR of Rs 12 crore and transfer it to a specific SBI account in Palayamkottai without disclosing the name of the beneficiary. The letter, however, carried the credentials of the financecontroller of KIADB and the official seal of the government body. Based on the letter, Rajakrishnan preclosed the FDR and even deducted the TDS cut as per the normal procedure but did not return it to KIADB in Bangalore. "The basic motive was to take the Rs 12 crore that was deposited and illegally withdrawn. So the money was rerouted to another account and then withdrawn and directed to other accounts," said a CBI official.
However, KIADB approached the bank on September 7, 2012 demanding the payment of their matured deposits worth Rs 25 crore. They were paid only for the Rs 13 crore FDR that was with the bank and an inquiry was initiated on the basis of their subsequent complaint. It was later revealed that the letter received at the bank demanding the pre closure of the Rs 12 crore FDR was forged and manipulated with the alleged help of Rajakrishnan and the remaining 10 accused
UCO Bank has lodged complaints of two alleged frauds — one related to the West Bengal Infrastructure Development Finance Corporation (involving Rs 120 crore) and the other linked to West Bengal State Cooperative Bank (involving Rs 20 crore) — with the Central Bureau of Investigation.
The Bank’s officer on special duty, S.C. Sharma told Business Line that the lender had complained of alleged “frauds” related to its Circus Avenue branch and the Hastings branch in the city. “The WBIDFC-related complaint was filed on March 14 with the CBI fraud cell in New Delhi. The other related to the WBSCB was lodged on March 16”, the official said.
For a bank, it is mandatory to file complaints regarding such “high-value” (over Rs 15 crore) frauds with the CBI. Sharma said though the CBI was yet to swing into action, the Kolkata Police was continuing with the investigation.
On a complaint by the State Government unit — WBIDFC — on March 13, Kolkata Police arrested the branch manager of the UCO Bank Circus Avenue branch last Thursday.
However, according to sources, no arrest has so far been made in relation to the alleged fraud involving Hastings branch of the branch. The cooperative bank, which was also defrauded by fake fixed deposit certificates, also filed an FIR with the police.
Bank officials said five staff members of the Hastings branch and 12 at the Circus Avenue branch have been suspended.
“It seems a racket involving people within the organisations and the bank was behind the wrongdoings”, said a source.
UCO Bank claimed on Saturday that the WBIDFC did not have any current or term deposit account with the Circus Avenue branch of the bank. Neither did the branch submitted any bulk deposit rate quotation to the corporation, it said.
The bank also said that the so-called two fixed deposit certificates, allegedly issued by the Circus Avenue branch to WBIDFC, were “fake”. The bank further said, “at no point of time the said bank branch has issued any deposit certificate” to WBIDFC.
According to WBIDFC, the corporation had transferred Rs 59 crore from Bank of India on August 30 last year and deposited it to Circus Avenue branch of UCO Bank. “On January 10 this year, we further transferred Rs 61 crore from Indian Bank to the UCO Bank’s branch. WBIDFC obtained two separate fixed deposit certificates from the bank, signed by the branch manager”, Avirup Sarkar, Chairman of the WBIDFC, had told Business Line last week.
New Delhi, Thu Jun 14 2012, 19:29 hrs
The Central Vigilance Commission has asked the CBI to investigate a large scale fraud committed by a private firm by allegedly misusing Rs 1,100 crore loan taken from different nationalised banks and wrongly claiming its end-use.
CVC officials said the firm was taking loans from various banks with the stipulations that it will be used by farmers of different states for growing and supplying castor seeds.
They said Indian Bank's Gotri Branch in Ahmedabad has sanctioned a short term loan of Rs 50 crore on December 31, 2007 to 11 commission agents under tie-up arrangements with the private limited firm.
"The loan were sanctioned to the commission agents for onward lending to farmers for procurement of castor seeds and its cultivation. However, several irregularities were reported in the loan accounts such as disposal of hypothecated stocks, fictitious commission agents, etc", the CVC said. A study conducted by the bank brought out that the firm had played a fraud by availing the loans in the names of commission agents.
While examining the case, it was found that the said firm was given loans by various banks with the stipulation that end use of fund should be used by farmers for growing and supplying castor seeds to the firm, the Commission said.
"However the loan proceeds were not used for the envisaged purpose of onward financing to farmers and the proceeds were diverted.
"The total amount involved in the whole case is Rs 1,110 crore and a consortium partners of nine banks lead by State Bank of India (SBI) and various other banks as consortium had lent to the firm", it said.
According to officials, the Commission is looking into the role of certain banks officials for their alleged involvement in the alleged fraud.
It has also come to the notice of various banks that the firm has perpetrated a fraud on other banks as well. "The loan amount has been syphoned off through Village Level Aggregators (VLAs) appointed by the company", the CVC said.