BOI Chief Manager sent to 3 Years Jail in Loan Fraud Case

For his role in a bank fraud case, Jeevangine Srinivasa Rao (J.S. Rao), the former chief manager of Bank of India's SM Road Branch in Ahmedabad, was convicted to three years in prison and fined ₹1.5 lakh by a special CBI court in Ahmedabad. 

On October 30, 2003, J.S. Rao and others were the subject of a case filed by the Central Bureau of Investigation (CBI). 

According to the Prevention of Corruption Act, the lawsuit was founded on claims of criminal conspiracy, fraud, forgery of valuable security, and criminal misconduct. 

The CBI claims that in order to obtain a loan, private participants in the conspiracy provided fictitious collateral security.

According to the investigation, J.S. Rao used dishonest methods to approve a loan of ₹80 lakh for private individuals. 

Among the loans were: 

As working capital, 

₹30 lakh A Letter of Credit (LC) for ₹25 lakh As a term loan, 

₹25 lakh These loans were made using fake and falsified collateral security, 

which caused the bank to suffer an unjustified loss and the accused to profit illegally.

 Additionally, the CBI discovered that Rao failed to properly investigate the business operations of the private entity both before and after the sanction. 

Even though he was aware that the company had previously provided fictitious collateral security, he nevertheless approved more phony paperwork, including as an equitable mortgage for a Gandhinagar plot.

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ED attaches assets of Rs 1.52 crore in bank fraud case linked to demonetisation transactions

 

In the Netar Sabharwal and others bank fraud case, the Directorate of Enforcement (ED), Lucknow Zonal Office, temporarily attached movable assets valued at Rs 1.52 crore in accordance with the Prevention of Money Laundering Act (PMLA), 2002.

Manmohan Agarwal, the proprietor of M/s Shiv Jewellers, has two fixed deposits totaling about Rs 1.22 crore, and Mayur Agarwal, the proprietor of M/s JS Jewellers, has two fixed deposits totaling approximately Rs 30.76 lakh. These properties are attached.

An FIR filed by ACB, CBI Ghaziabad under various sections of IPC, 1860, alleging that bank accounts were fraudulently utilized for cash deposits during the November–December 2016 demonetisation period prompted the ED to launch an inquiry.

According to the ED's research, money was fraudulently put into some bank accounts during the demonetisation period. The inquiry also found that J&K Bank officers and executives engaged in criminal conspiracy with some private individuals, committed forgery by fabricating bank documents for these accounts, and willfully permitted the large cash deposits during the demonetization.

The ED investigation also discovered that money that had been fraudulently deposited in some bank accounts during the demonetisation process had been layered and routed several times in a sequence of suspicious transactions before being sent to the final recipient under the guise of legitimate business dealings.

According to the ED's research, money was fraudulently put into some bank accounts during the demonetisation period. The inquiry also found that J&K Bank officers and executives engaged in criminal conspiracy with some private individuals, committed forgery by fabricating bank documents for these accounts, and willfully permitted the large cash deposits during the demonetization.

The ED investigation also discovered that money that had been fraudulently deposited in some bank accounts during the demonetisation process had been layered and routed several times in a sequence of suspicious transactions before being sent to the final recipient under the guise of legitimate business dealings. According to the ED's probe, M/s Shiv Jewellers (owned by Manmohan Agarwal) and M/s JS Jewellers (owned by Mayur Agarwal) were the most

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Fraud of Rs 196 crore Found in PSU Bank

In accordance with the Prevention of Money Laundering Act (PMLA), 2002, the Ahmedabad Zonal Office of the Directorate of Enforcement (ED) has temporarily attached real estate valued at Rs.15.01 crore (current market value of Rs.20 crore). Directors, partners, and family members of M/s Jyoti Power Corporation Pvt. Ltd. (JPCPL) own the properties.

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After the Mumbai Economic Offenses Branch of the Central Bureau of Investigation (CBI) submitted a formal complaint (FIR), the ED started its investigation. The FIR, which was filed in accordance with the Prevention of Corruption Act and the Indian Penal Code (IPC), charged JPCPL and its directors, Kamlesh Kataria and Nitesh Kataria, with fraudulently defaulting on loans from the Bank of India (BOI). The bank lost Rs.196.82 crore as a result of the alleged fraud.

The ED claims that JPCPL obtained a number of credit facilities from BOI and a group of other banks. The company's directors' personal accounts and a number of other companies received these funds. Important conclusions include:

Money was misappropriated and transferred to non-consortium banks under the pretense of labor payments.Assets, both fixed and movable, were sold without the banks' consent.In order to hide the proceeds of the crime, properties bought with bank monies were given to family members without any payment.

To recoup a portion of the fraudulent sum, the ED has seized properties owned by the directors of the company and their families. Deliberate attempts to conceal the fraud's proceeds were exposed by the investigation, including the transfer of assets to businesses that had been detected.

The ED has claimed that further investigations into the issue are underway to find new details and take required action. This development underscores the agency’s commitment to reducing financial crimes and ensuring accountability for fraudulent acts.

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CBI Registers Case Against ZM and other officials of PSU bank in Corruption Case

The Central Bureau of Investigation (CBI) has filed a corruption complaint against three former senior Bank of India (BOI) officials in a recent development. The Lokpal, India's anti-corruption watchdog tasked with looking into claims of wrongdoing against officials of the central government, has directed this action.

Based on a complaint that had been made the previous year, the case was started following Lokpal's ruling on August 29. Lokpal gave the CBI instructions to look into three former BOI officers' and other unidentified people's possible involvement in a corruption offence. The chief manager of the Satara branch, the deputy zonal manager of the Kolhapur zone, and the previous zonal manager of the Kolhapur zone are the three authorities. The inquiry also includes any potential involvement from unidentified private citizens and official employees. In accordance with certain provisions of Indian law, the CBI filed a case, which included:

* Section 420 of the Indian Penal Code (IPC): This covers cheating and criminal conspiracy.Section 7 of the Prevention of Corruption Act: This focuses on the abuse of official position by public servants.

* These charges indicate serious allegations of misconduct, with the officials accused of abusing their positions for personal gain.

The complainant's and the accused public workers' identities must be kept private per the Lokpal's direction. This is compliant with the Lokpal (Complaint) Rules, 2020, which are designed to safeguard the parties' identities for as long as necessary to comply with legal requirements. This case highlights the continuous endeavors of anti-corruption organizations in India to make public servants responsible for their abuse of authority. In the upcoming days, more information should become available as a result of the investigation.

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CBI files chargesheet against former CMD of PSU Bank

 The Central Bureau of Investigation (CBI) has filed a charge sheet against Alok Kumar Misra, the former chairman and managing director (CMD) of Bank of India (BOI) and Oriental Bank of Commerce (OBC), along with 33 other individuals and companies. This charge sheet is related to the alleged bank fraud committed by Dewan Housing Finance Ltd (DHFL), which is worth nearly ₹35,000 crore. The fraud was allegedly carried out by the Wadhawan brothers, Kapil and Dheeraj, who ran DHFL. The charge sheet also exonerates 49 other companies that were originally named as accused in the case.

According to the CBI, Alok Kumar Misra allegedly received a benefit of ₹1.5 crore from DHFL in the form of a discounted flat for his son in Mumbai. This benefit was allegedly given to him in exchange for sanctioning loans in his capacity as the head of BOI and OBC. Misra served as the CMD of BOI from 2009 to 2012 and OBC from 2007 to 2009.

The CBI’s investigation revealed that between January 2010 and December 2019, a consortium of 17 banks extended credit facilities worth ₹42,871 crore to DHFL. The Wadhawan brothers allegedly siphoned off the funds to shell companies known as ‘Bandra Book Entities,’ causing a loss of ₹34,926 crore to the consortium. 

The charge sheet also names other companies and individuals who helped the Wadhawan brothers divert funds.

It is important to note that the charge sheet against Alok Kumar Misra was filed after obtaining sanction under section 17A of the Prevention of Corruption Act, which is mandatory for investigating a public servant. However, a sanction under section 19 of the PC Act, which is mandatory for prosecuting a public servant, is still pending.

The charge sheet was taken cognizance of by a Delhi court on April 27.

During its investigation, the CBI found that out of the 131 companies originally named in the first information report (FIR) filed in June 2022, 49 companies were “genuine” borrowers without any bad intentions. These companies had entered into actual loan transactions with DHFL, following the necessary procedures and guidelines set by the Reserve Bank of India (RBI). 

The court has exonerated these companies from any criminal liability based on the CBI’s findings. The CBI has identified genuine loan transactions worth ₹13,425 crore, out of which ₹5,836 crore has already been repaid by these 49 companies to DHFL or the Resolution Professional.

The CBI has filed 2,70,000 pages of fresh documentary evidence in 20 trunks in the court, along with a list of 521 new witnesses to support its case against the accused.

It is worth mentioning that Alok Kumar Misra has held several high-level positions in the banking sector, including the chairman and managing director of Bank of India and Oriental Bank of Commerce.

The ownership of DHFL has changed since the bank fraud case came to light, as it was taken over and sold under India’s bankruptcy code.

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Gold Loan Fraud of Rs. 1.24 crore in PSU Bank

A significant gold loan fraud case was recently discovered at the Bank of India. In the Bank of India branch in Saraidhela, 28 individuals turned in 3.5 kg of phony gold in exchange for a Rs. 1.24 crore bank loan. A police report has been made against the business correspondent, gold valuer, and borrowers who were complicit in this fraud.

The accounts turned non-performing and the gold secured by the loan was revalued, which is when the issue was discovered. The fact that the gold being held in safe custody was counterfeit stunned the branch officers. Vishwa Pratap Singh, the senior branch manager, filed a police report at the Saraidhela station.

From January 2022 to January 2023, loans were made secured by counterfeit jewelry. Loan accounts quickly became non-performing assets (NPAs) due to non-payment by borrowers. The bank sent notifications to the loan holders to collect the unpaid balance in response to the circumstances. The loan holders received notice that if the installments were not deposited, their jewels would be put up for auction. When the loan holders ignored the notices, though, bank officials were taken aback.

In order to open the sealed packages containing the mortgaged valuables, a committee was established. The jewelry was reassessed and a video was completed. Reassessment revealed that the jewelry was, in fact, phony.

In March, the Reserve Bank of India had asked banks to share with it information on frauds reported in gold loans, actions taken by them to recover the money and defaults in the portfolio.

The RBI also asked banks to review their lending processes to check if they are in compliance with the regulator’s gold loan guidelines. The RBI sought this information after it found that employees of two state-run banks manipulated its system to meet gold loan targets.

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बैंक की पूर्व वरिष्ठ प्रबंधक को जेल:सात साल की कैद के साथ 15 करोड़ जुर्माना

 

An Ahmedabad CBI court on Thursday convicted a former Indian Overseas Bank (IOB) manager on graft and forgery charges and sentenced her to seven years’ imprisonment and imposed a penalty of Rs 15.06 crore.

The court of special CBI judge Digant Arunbhai Vora held the accused – Preeti Vijay Sahjwani – a former senior manager at IOB’s Vastrapur branch, had “undeniably indulged in white collar crime and economic and social crime”.

The judge has held Sahjwani guilty under Prevention of Corruption Act’s sections 13 (1) (c), 13(1)(d), 13 (2) and IPC sections 467, 471 (forgery) and 409 (criminal breach of trust by bankers).

Sahjwani, between 1998 and 2001, was accused of allegedly cheating IOB to the tune of Rs 2.14 crore by way of crediting final maturity payments of FCNR (foreign currency non-resident) deposits of two accounts into two fictitious accounts – one a cash credit account and another a savings account – without any authority letter from the depositor or from the power of attorney holder.

She had also sanctioned loans and cash credits in the name of five fake persons, amounting to approximately Rs 1.40 crore against the security of unsurrendered deposit receipts of actual depositors, by making alterations in the amount, date, maturity value, etc. It was alleged that Sahjwani had caused a wrongful loss of over Rs 2 crore, including interest, as on July 27, 2001.

An offence was registered in 2001 and chargesheet was filed in October 2003 for criminal breach of trust, forgery of valuable security using forged documents, and criminal misconduct. It was alleged that Sahjwani had misused her official position by indulging in the offences.

The special CBI court, while imposing a fine of Rs 15 crore, which is to be returned to the bank, observed that taking into account the loss caused to the bank (which would amount to present day value worth over Rs 84 crore as on date), and inflation, interests etc, the court has taken into account the accused’s economic condition. Notably, the accused herself is a law graduate.

“The perpetrators of white collar crime are not the lower class citizens of the society but the middle class professionals, higher officials etc. The victims of white collar crime are common people of the society and the nation. The main motive behind white collar crimes is always financial gain and individuals committing these types of crimes enrich themselves illegally.

 Wealth, luxurious life and financial stability motivate the guilty-minded persons to commit such crimes… Corruption crimes committed by public servants are more fatal to the society and the country than ordinary crimes because the consequences of white collar crime are far greater and far-reaching than ordinary crimes,” Judge Vora observed.

The judge said that the crimes of corruption undermine the morale and self-confidence of people while white collar criminals use their experience, position and well-educated mind in a planned manner and misuse the trust and confidence placed on them by the organisation.

Sanjhwani had been absconding during the probe and she was taken into custody only in 2012 after she was detained by Canadian immigration authorities and was deported to India in January 2012.

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Police summons MDs of 4 Banks, 11 Bank Employees arrested

A number of bankers have been arrested in recent cyber fraud investigations due to allegations that they were involved in fraudulent operations. The managing directors of Yes Bank, ICICI Bank, RBL Bank, and Kotak Mahindra Bank are among the four private banks that the city police have written to, demonstrating how seriously they regard this issue. The letter's objective is to ask them to come in person the next week to provide an explanation for why no legal action should be taken against them.

Role of Bankers in Cyber Fraud Cases

When authorities discovered that the account holders implicated in illegal activities were unaware that they had opened such accounts, the role of bankers came under investigation. It was found that the bankers had helped cyber criminals open these accounts after more inquiry. The fact that the bankers charged a sizable commission in each instance suggests that they were aware that they were involved in illegal activity.

Victims of Fraudulent Investment and Task-based Schemes

Many people have been duped by schemes that promise large returns on investments or possibilities depending on tasks. In addition to apprehending the cyber criminals, the local police have shown initiative by making the bankers answerable for their involvement in these cyber fraud cases. As a result, the city police are the only law enforcement agency in the nation authorized to detain bankers in conjunction with other suspects in similar circumstances.

Read More - सबसे बड़ा बैंकिंग घोटाला: भारत देश में अब तक का सबसे बड़ा बैंक फ्रॉड, करोडो का बैंको को लगाया चुना

Exposing the Role of Bankers

During the investigation, it was discovered that the employees of Kotak Mahindra Bank’s MG Road branch were involved in fraudulent activities. They were subsequently arrested, and during the interrogation, they confessed to the involvement of several other bankers in similar fraudulent acts. Recognizing that bank accounts are a crucial component in cyber frauds, the police decided to investigate the criminal activities of bankers in such cases.

Violations of KYC Norms

In light of the recent arrests, the city police have written to the managing directors of Kotak Mahindra Bank, ICICI Bank, RBL Bank, and Yes Bank. The purpose of this letter is to request their personal appearance and an explanation as to why legal action should not be initiated against them for clear violations of the Reserve Bank of India’s (RBI) Know Your Customer (KYC) norms.

Bankers’ Methods and Tactics

During the ongoing investigations, the police have found that the bankers accused of aiding cyber criminals opened bank accounts using identification and address proofs collected from factory workers and laborers. They even gained access to the bank accounts of daily-wage workers by offering them money. Additionally, the police noticed the use of fake IDs, address proofs, and forged signatures to open bank accounts, further exposing the deceptive tactics used by these individuals.

Read More - Suspicious transactions detected in this bank,three staffs arrested

Bank Responsibilities and Accountability

The Deputy Commissioner of Police(Cyber Crime), Siddhant Jain, emphasized that bank managements have a responsibility to safeguard their clients’ money and protect it from cyber criminals. If bank employees are involved in criminal activities and aiding fraudsters, it is the duty of the bank managements to explain why action should not be taken against them. The police are determined to hold the responsible parties accountable for their actions in order to protect the public and maintain the integrity of the banking system.

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