Tag: bank fraud

Bankers plan to seek safeguards against undue vigilance action, BFSI News, ET BFSI

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Bankers will seek a more robust framework for protecting them from any undue vigilance action in bona fide commercial decisions at a stakeholder conference on November 17-18 organised by the government to address issues relating to credit flow into different sectors of the economy.

Industry chambers and financial institutions, including non-banking financial companies (NBFCs), have been invited to the conference.

A senior bank executive told ET that a representation had been made to the finance ministry on this count.

Besides the finance ministry, senior officials from other ministries will also be a part of this stakeholder conference and provide insights to projects in the pipeline in their respective areas. Finance minister Nirmala Sitharaman will meet bankers, including from the private sector, financial institutions and other stakeholders at the two-day meeting.

“We want bankers to be protected under Section 197 of The Code of Criminal Procedure (CrPC) and bring them on a par with other government officials,” the bank executive said. “We will bring this to the attention of the finance minister.”

Under Section 197, a court cannot take cognisance of a criminal charge against a public servant unless there is prior sanction from the competent authority to prosecute him.

The move comes in the backdrop of Rajasthan police arresting former State Bank of India chairman Pratip Chaudhuri in relation to a complaint by a loan defaulter.

The government had, recently, issued a circular that laid down the standard operating procedure for processing cases under Section 17A of the Prevention of Corruption Act. As per the guidelines, any police inquiry on decisions taken by public servants in discharge of their duties need prior nod from the competent authority.

“These guidelines were flouted and hence it is necessary that a more robust framework should be put in place,” said another bank executive.

Last month, the finance ministry had advised state-run lenders to adopt broad guidelines on ‘Staff Accountability Framework for NPA Accounts up to ₹50 crore (Other than Fraud Cases)’. The new guidelines are aimed to protect bank staff taking commercial decisions as well as to ensure faster dispensation of vigilance cases while taking into account employees’ past track record.



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CBI searches premises of ex-MP minister in connection with bank fraud case, BFSI News, ET BFSI

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The CBI conducted searches on Thursday at the premises of Surendra Patwa, a BJP MLA from Bhojpur near Bhopal, after booking him for alleged fraud of Rs 29.41 crore in the Bank of Baroda between 2014 and 2017, officials said.

Patwa was earlier a minister in the Madhya Pradesh government.

The case pertains to a loan of Rs 36 crore taken from the bank for Patwa’s car showroom in Indore — Patwa Automotive Private Limited — which was not repaid to the bank, the officials said.

The Central Bureau of Investigation (CBI) has booked Patwa, a director in the company, and another director, Monika Patwa, they added.

Patwa is the nephew of former Madhya Pradesh chief minister Sunder Lal Patwa. He was also the tourism and culture minister of the state.

“It was alleged that the borrower company had committed fraud during the period of 2014 to 2017 in conspiracy with its directors and unknown public servants and cheated the Bank of Baroda to the tune of Rs 29.41 crore (approx.),” CBI Spokesperson RC Joshi said in a statement.

Searches were conducted at the premises of the accused in Bhopal and Indore, which led to the recovery of incriminating documents, he added.

The CBI has alleged that the firm was extended the working capital loan and a term loan amounting to Rs 36 crore by the Bank of Baroda on September 13, 2014, after taking over the credit facilities extended by the IDBI Bank.

“The said loan account became an NPA on May 2, 2017 and was subsequently reported as fraud to the RBI. The outstanding loan amount was Rs 29.41 crore. It was also alleged that the forensic accounting had revealed siphoning of funds and diversion of funds by the said private company,” Joshi said.

Patwa did not respond to a request seeking his comments on the development. PTI ABS RC



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HC refuses to grant interim relief to Shiv Sena’s Anandrao Adsul, BFSI News, ET BFSI

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The Bombay High Court on Friday refused to pass any order granting interim protection from coercive action to Shiv Sena leader and former MP Anandrao Adsul in connection with an alleged Rs 980 crore fraud at the City Co-operative Bank. Adsul had moved HC this week challenging the case and the summons issued by the ED directing him to appear before it for questioning.

Adsul’s counsel Abhinav Chandrachud told a division bench of Justices S S Shinde and Justice N J Jamadar that proceedings initiated by ED were at the instance of political rivals with the support of the ruling party at the Centre.

“Proceedings initiated by ED against Adsul clearly smack of political vendetta being settled through enforcement agencies, which are armed with powers of civil court during investigation and have been elevated to the status of court,” Adsul said in his plea.

Chandrachud told the court the proceedings before the ED had been initiated based on the complaint of Ravi Rana, husband of Amravati Lok Sabha MP Navneet Kaur.

He added that Adsul had filed a petition against Kaur’s caste certificate, and the HC had, earlier this year, cancelled the caste certificate.

Chandrachud argued that Rana had complained as retaliation to Adsul challenging the validity of Kaur’s caste certificate.

He further told the court Adsul was the original complainant in the case registered by the city police’s Economic Offences Wing in the alleged bank fraud case.

Opposing the relief sought, Additional Solicitor General Anil Singh, appearing for ED, asked the court to consider Adsul’s conduct when the summons were issued to him.

“When ED went to serve the summons, he (Adsul) created a scene. Got himself an ambulance and went to a hospital. There he was found to be fine, so he went to another hospital and got himself admitted. This conduct has to be looked into,” Singh argued.

He further argued that a person may or not be an accused in a case but the ED has to question every party involved to trace the proceeds of crime in a money laundering case.

The court, after hearing the matter briefly, said it was not inclined to pass any order granting relief to the petitioner at this stage.

“It is not uncommon for informant to become accused. We are not inclined to grant any relief today,” the bench said, and posted the matter for further hearing on October 8.

The ED case against Adsul pertains to alleged irregularities of Rs 980 crore in the City Cooperative Bank, of which he was former chairman.

The money laundering case is based on a First Information Report (FIR) of Mumbai Police Economic Offences Wing (EOW) into the alleged irregularities in disbursement of loan funds and other financial transactions of the bank.



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CBI books firm, CMD for Rs 1.5K cr bank fraud, BFSI News, ET BFSI

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Shimla: The Central Bureau of Investigation (CBI) has registered a case against a Delhi-based private company, which has its industrial unit in Himachal Pradesh, and others including its promoter & CMD; director/guarantor & two corporate guarantors; unknown public servant(s)/unknown others, for allegedly conspiring with each other to defraud banks, while causing a loss of around Rs 1,528.05 crore to the consortium of 16 banks led by Bank of India.

The consortium banks were – Bank of India, Union Bank of India, Andhra Bank, Punjab & Sind Bank, Indian Overseas Bank, State Bank of Hyderabad, Central Bank of India, Corporation Bank, HDFC Bank Limited, Oriental Bank of Commerce, Saraswat Co-operative Bank, State Bank of Patiala, UCO Bank, Allahabad Bank, Standard Chartered Bank & DBS.

The case has been registered against Indian Technomach Company Limited, its promoter & CMD Rakesh Kumar Sharma, director/guarantor Vinay Kumar Sharma, Gurupath Merchandise Limited (corporate guarantor), Kolkata, and Thunder Traders Limited (Corporate Guarantor), Kolkata, and unknown public servants/others.

CBI officials said searches were conducted on Wednesday at various premises, including at Kangra and Paonta Sahib in Sirmaur district, Himachal Pradesh.

It was alleged that the private company, engaged in manufacturing of ferrous and non-ferrous metal, obtained credit facilities/loans from the consortium of 16 nationalised/private banks from 2008 to 2013 with Bank of India as lead bank.

The accused had allegedly conspired with an intention to defraud the banks through said acts and diverted funds from the loan account, thus causing a loss of Rs 1528.05 crore to the said consortium of the banks.

The account was classified as NPA in the books of accounts of Bank of India with effect from March 31, 2014 due to overdue status of the account in line with IRAC guidelines. The account was red-flagged by Bank of India, as advised by RBI in May 2015 and was declared a fraud in February 2016.



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CBI files chargesheet in Rs 209 crore bank fraud, BFSI News, ET BFSI

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JAIPUR: The Central Bureau of Investigation (CB) filed a chargesheet against 18 accused for their alleged involvement in causing a loss of nearly Rs 209 crore to the Syndicate Bank.

In a statement released Wednesday, the agency said the chargesheet has beeen submitted before the court of special judge, CBI cases in Jaipur. The agency named 18 people which included a chartered accountant and former officials of the Syndicate Bank, among others.

The CBI said that it had registered a case back in 2017, following a complaint from the bank’s regional office located in Jaipur, which alleged that 118 loans were sanctioned and disbursed from three branches of the bank located in Jaipur and Udaipur.

“The 118 loans were housing loans, term loans for the purchase of commercial property in World Trade Park (WTP), among others,” the agency said in the statement.

As per the agency, an Udaipur-based CA, identified as Bharat Bomb, along with his employees and others hatched a conspiracy with bank officials in Jaipur and Udaipur to sanction various credit facilities.

“The accused thereby cheated the bank to the tune of Rs 209.93 crore (approximately) on the basis of forged and fabricated documents, bills, quotations, certificates, etc. It was also alleged that several of the borrowers were found to be ordinary employees in firms owned by the CA and others, and (they were) not eligible for such high-value loans,” the agency said.

During its investigation, the CBI found that the accused had allegedly approached the bank’s Jaipur branch located on MI Road, seeking term loans for purchasing commercial properties and units at the World Trade Park ltd, on the basis of forged income tax returns showing inflated income of the borrowers, forged quotations, invoices, purchase orders, work orders, and forged CA certificates along with audited financial statements.

It was also alleged that the then manager of the bank’s MI Road branch recommended and the then AGM/branch head to sanction various credit facilities by violating bank guidelines and without exercising due diligence. These bank officials allegedly sanctioned term loans for the purchase of commercial properties, housing properties, and working capital term loans to various individuals, firms, and companies linked to the accused.

“Searches were also conducted at various premises of (the) accused. Further investigation is will be done to look into the role of the other accused,” the agency said.



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CBI files chargesheet in Rs 209 crore bank fraud, BFSI News, ET BFSI

Banking & Finance

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JAIPUR: The Central Bureau of Investigation (CB) filed a chargesheet against 18 accused for their alleged involvement in causing a loss of nearly Rs 209 crore to the Syndicate Bank.

In a statement released Wednesday, the agency said the chargesheet has beeen submitted before the court of special judge, CBI cases in Jaipur. The agency named 18 people which included a chartered accountant and former officials of the Syndicate Bank, among others.

The CBI said that it had registered a case back in 2017, following a complaint from the bank’s regional office located in Jaipur, which alleged that 118 loans were sanctioned and disbursed from three branches of the bank located in Jaipur and Udaipur.

“The 118 loans were housing loans, term loans for the purchase of commercial property in World Trade Park (WTP), among others,” the agency said in the statement.

As per the agency, an Udaipur-based CA, identified as Bharat Bomb, along with his employees and others hatched a conspiracy with bank officials in Jaipur and Udaipur to sanction various credit facilities.

“The accused thereby cheated the bank to the tune of Rs 209.93 crore (approximately) on the basis of forged and fabricated documents, bills, quotations, certificates, etc. It was also alleged that several of the borrowers were found to be ordinary employees in firms owned by the CA and others, and (they were) not eligible for such high-value loans,” the agency said.

During its investigation, the CBI found that the accused had allegedly approached the bank’s Jaipur branch located on MI Road, seeking term loans for purchasing commercial properties and units at the World Trade Park ltd, on the basis of forged income tax returns showing inflated income of the borrowers, forged quotations, invoices, purchase orders, work orders, and forged CA certificates along with audited financial statements.

It was also alleged that the then manager of the bank’s MI Road branch recommended and the then AGM/branch head to sanction various credit facilities by violating bank guidelines and without exercising due diligence. These bank officials allegedly sanctioned term loans for the purchase of commercial properties, housing properties, and working capital term loans to various individuals, firms, and companies linked to the accused.

“Searches were also conducted at various premises of (the) accused. Further investigation is will be done to look into the role of the other accused,” the agency said.



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CBI carries out searches at 100 locations across 11 states, BFSI News, ET BFSI

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NEW DELHI: The Central Bureau of Investigation (CBI) on Thursday carried out nationwide searches at 100 locations in separate alleged bank fraud cases of over Rs 3,700 crore, officials said.

The coordinated search operation was spread across 11 states and pertained to 30 FIRs related to bank fraud, they said.

“These searches are part of a special drive to book fraudsters on the complaints received from different nationalised banks in India. The complainant banks include Indian Overseas Bank, Union Bank of India, Bank of Baroda, Punjab National Bank, State Bank of India, IDBI, Canara Bank, Indian Bank and Central Bank of India,” CBI spokesperson R C Joshi said.

The searches were spread across Kanpur, Delhi, Ghaziabad, Mathura, Noida, Gurgaon, Chennai, Thiruvarur, Vellore, Tiruppur, Bengaluru, Guntur, Hyderabad, Ballari, Vadodara, Kolkata, West Godavari, Surat, Mumbai, Bhopal, Nimadi, Tirupati Visakhapatnam, Ahmedabad, Rajkot, Karnal, Jaipur and Sri Ganganagar.

“It may be stated that the CBI has been receiving a number of complaints from various banks alleging cheating, diversion of funds, submission of fake/forged documents by different defaulting firms while obtaining loans/credit facilities etc,” Joshi said.

The CBI added it was receiving allegations that such firms have been turning defaulters, resulting in the loans becoming Non-Performing Assets (NPAs), thus causing heavy losses to the public sector banks.

“After scrutiny, the cases are registered by CBI. Thorough investigation is carried out in order to book the culprits, take them to face the law and endeavour to salvage public money,” Joshi said.



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