Supreme Court opens FIR Against Bank of India(BOI) in Gold Loan Case

A businessman obtained a loan from the Bank of India's Motijhil Branch in order to obtain the money he needed. On July 22, 2020, he was granted a loan of ₹7,70,000 after pledging 254 grams of 22 carat gold pieces as security. The payback of this loan is the point of contention. 

The appellant claims that after receiving a notification from the bank on October 7, 2022, requesting payment of ₹8,01,383.59, including interest, he paid the amount on March 31, 2023. He was unaware that the bank had revalued the gold he had pledged and had taken ₹1500 out of it for expenses.

His requests to return the gold that had been committed were denied for years. However, the bank claims that he failed to repay the loan, which is why the gold became a bank asset. 

 When it was purportedly reported by a valuer other than the one who had initially assessed the appellant's gold at the time of the loan that the material pledged was not gold in reality but rather gold plated on top of other metals, the aforementioned gold was revalued in order to recover the money involved in the transaction and was discovered to be counterfeit.

Additionally, the appellant filed a formal complaint against the bank's branch and credit manager for violations of Sections 420, 406, and 34 of the Indian Penal Code. 

The Patna High Court granted the respondent's (bank manager's) request to have the FIR quashed. A Special Leave Petition (SLP) has been submitted in response to this. The FIR against the bank has now been reopened by the Supreme Court.

Court Order

A bench of Justice Sanjay Karol and Justice Manoj Misra said that the High Court had looked at the bank’s policy to prevent and detect fraud and also considered the removal of the first valuer. 

Based on this, the High Court concluded that the bank had no bad intentions. It also said that the person who filed the case (the appellant) had tried to get a loan from the bank with bad intentions.

However, the judges of the Supreme Court stated that they were unable to comprehend how the High Court arrived at this result because genuine evidence is necessary to determine someone's purpose. They further questioned how, in the absence of evidence, the High Court determined that the applicant had a hidden motivation. 

 The Court added that there's still a chance the bank misappropriated money. When the High Court dismissed the FIR (police report), it failed to adequately take this into account. Furthermore, the bank failed to have a third party confirm the second valuer's findings. 

 Therefore, it is impossible to say with certainty that nobody from the bank or the valuers did anything improper with the gold that the appellant pledged without considering all of the available evidence.

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PSU Bank Officer Arrested for creating Fake Gold Loan Documents

 

A Canara Bank employee was detained by the Perambalur District Crime Branch police on Sunday for fabricating gold loan paperwork and defrauding the bank of Rs.1.2 crore.

Akash Chauhan, the 29-year-old officer, hails from Udaipur, Rajasthan. He was employed at Canara Bank's Labbaikudikadu branch in the Perambalur area, namely in the Gold Loan division.

The police claim that Akash started working for the bank in May 2022. He made fictitious gold loan documents in five customers' names while he was there. He moved the full amount of the loan, Rs.1.2 crore, into his personal bank account rather than disbursing it to the clients.

The fraud was discovered after a complaint was filed by N. Loga Krishnakumar, a 46-year-old Assistant General Manager from the Canara Bank regional office in Namakkal. After investigating the complaint, the District Crime Branch confirmed the fraud and arrested Akash Chauhan.

A press release by the police confirmed that Akash had misused his position to steal money from the bank by faking documents and cheating the system. Gold loan fraud is a serious threat to the credibility of banks and NBFCs (Non-Banking Financial Companies). While gold loans are a valuable financial tool for millions, increasing fraud cases highlight the urgent need for stronger checks, transparency, and accountability in the system.

 

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Gold Loan Fraud of Rs.1.65 crore in Bank: Female Officer Fired

An assistant manager at the Rajim branch of Indian Overseas Bank was arrested for stealing more than Rs 1 crore through the issuance of fraudulent jewelry loans. Ankita Panigrahi, the accused, was apprehended from Bargarh, Odisha, by the State Economic Offenses Investigation Bureau (EOW). The police started questioning her and pursuing additional legal action after the arrest.

Ankita Panigrahi was employed in 2022 as an Assistant Manager at Indian Overseas Bank's Rajim branch in the Gariaband district. She created fictitious jewelry loan records there by abusing locked bank accounts. She was able to take out Rs 1 crore 65 lakh from the bank in fraud by doing this.

When this fraud was discovered, the bank fired her right away. The Economic Offenses Wing (EOW) then formally filed a case against her in 2023. The case was brought under Section 409 of the Indian Penal Code, which addresses criminal breach of trust by a public worker, and Section 13(a) of the Prevention of Corruption Act, 1988 (as amended in 2018).

For a long time, Ankita had been absconding (hiding from the authorities), but the EOW finally tracked her down in Bargarh, Odisha. She was taken into police custody (remand) so that officials could question her thoroughly about the fraud. The EOW is now conducting a detailed investigation to uncover the full extent of the scam and to check whether other people were involved.

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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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