CBI court sentences bank officer to one-year RI in Chennai

4 Aug 14

The offiver forged signatures and misappropriated funds entrusted to him by crediting the money in the fake accounts and withdrawing the proceeds.

The CBI court on Wednesday sentenced a State Bank of India officer to a year’s rigorous imprisonment in a fraud case.

The anti-corruption branch of CBI, Chennai, registered a case against M. Murugappan, clerk-cum-typist at State Bank of India, Ambattur Industrial Estate branch, alleging he had cheated the bank by opening savings accounts in his relative’s names without their knowledge, during 1993-97.

He forged signatures and misappropriated funds entrusted to him by crediting the money in the fake accounts and withdrawing the proceeds.

He also destroyed evidence gathered against him. This resulted in the bank losing over Rs. 31 lakh.

Following trial, E.M.K. Siddharthar, XI additional special judge for CBI cases, convicted Murugappan and slapped a fine of Rs. 40,000 on him.

Syndicate Bank chief held on allegations of bribery

BS 3 Aug 2014

The Central Bureau of Investigation has arrested S K Jain, chairman and managing director of Syndicate Bank, for allegedly accepting bribes from private companies to extend credit facilities.

On Saturday, the agency conducted raids at 20 locations across Bangalore, Bhopal, Mumbai and Delhi, after registering a case in the matter. It confiscated Rs 50 lakh, allegedly received by Jain as bribe. “So far, searches have led to recoveries of several asset papers and incriminating documents,” said a CBI spokesperson.

During the raids, the CBI also unearthed about Rs 21 lakh in cash, gold worth Rs 1.68 crore and fixed deposit receipts of Rs 63 lakh.

The CBI alleged Jain had enhanced the credit limit to certain private companies, in violation of rules and regulations. The companies concerned are believed to be embroiled in the coal block allocation scam, according to the investigative agency.

Jain’s brother-in-law, as well as a chartered accountant, have also been taken into police custody. Vipul Agarwal of Prakash Industries Delhi has also been arrested in the case. Sources said a few others, including Neeraj Singhal, vice-chairman of Bhushan Steel, were also likely to be arrested.

Efforts to contact Singhal and the Bhushan Steel chief financial officer proved futile till the time of going to press.

For the quarter ended June, Syndicate Bank reported a 7.3 per cent rise in net profit at Rs 485 crore, compared with Rs 452 crore in the corresponding period last year. The bank’s total income rose 16.8 per cent to Rs 5,523 crore from Rs 4,726 crore in the year-ago period. During the same period, provisioning fell from Rs 489 crore to Rs 468 crore. While the bank’s net interest income rose one per cent to Rs 1,351 crore, against Rs 1,338 crore in the corresponding quarter last year, net interest margin declined to 2.47 per cent from 2.83 per cent. Deposits rose 17.72 per cent to Rs 2,14,863 crore from Rs 1,82,513 crore in the first quarter of 2013-14.

WELL VERSED IN VARIOUS FACETS OF BANKING

Sudhir Kumar Jain, whom Syndicate Bank employees describe as “soft-spoken”, took charge as chairman and managing director of the bank on July 8, 2013. A commerce graduate and chartered accountant, he started his career as credit manager at Dena Bank in 1987, steadily rising through the ranks to become general manager, heading the bank’s accounts, treasury, retail banking, investor relations and international segments. He also served as executive director of Bank of Baroda for two years. Jain, who hails from Rajasthan, has 27 years of experience in various facets of banking and has worked across capacities and locations, including Kolkata, Ahmedabad and New Delhi.

CBI registers case against Syndicate Bank CMD

Syndicate Bank CMD Sudhir Kumar Jain

BL :NEW DELHI, AUGUST 2: 2014

The Central Bureau of Investigation has registered a case of alleged bribery against the Chairman & Managing Director of Syndicate Bank, Sudhir Kumar Jain and 11 others including CMD & Directors of two private firms based at Delhi. Case has been registered under Prevention of Corruption Act, 1988 and criminal conspiracy.

The allegation pertains to Jain asking for bribe to extend credit facilities to certain companies. The agency also raided 20 places at 4 cities of Bangalore, Bhopal, Mumbai and Delhi. It has recovered bribe amount of Rs 50 lakhs. A senior CBI official said that cash amounting approximately Rs 21 lakh, gold worth Rs 1.68 crore and Fixed Deposit Receipts worth Rs 63 lakh found from Jain.

He also disclosed names of suspected/accused in this case which include Neeraj Singhal (Vice Chairman of Delhi based Bhushan Steel), Ved Prakash Agarwal (Chairman & Managing Director of Delhi based Prakash Industries), Vipul Agarwal (Prakash Industries), Pawan Bansal, Vineet Godha, Punit Godha, Vijay Pahuja, Pursotam Lal Totlani and Pankaj Bansal.

According to an official statement, it is alleged that the said public servant has been indulging into negotiations for illegal gratification directly as well as through middlemen for extending undue favour to private companies by granting sanction to various financial proposals. The private persons on behalf of companies and others allegedly enter into criminal conspiracy and obtain illegal gratification meant for the public servant and further deliver it to the middlemen on behalf of the public servant.

It is further alleged, that in one case, the public servant was directly negotiating with a private company for an illegal gratification of Rs. 50 lakh in lieu of granting credit extension to the said company as it had defaulted on the payment of loan installments amounting to crores of rupees to the bank. The officials of the said company allegedly agreed to pay the said illegal gratification and the money was transferred to the middlemen who are also relative of the public servant. CBI laid a trap and recovered the illegal gratification of Rs. 50 lakh on the spot after the said delivery was made.

Jain assumed charge as CMD of the bank on July 8 last year. He has been in banking industry for 26 years.

(This article was published on August 2, 2014)

Bank manager held for looting Rs 1.5 crore from customers

TNN | Jul 21, 2014, 03.19 AM IST

CHENNAI: Central Crime Branch sleuths arrested a senior official of a nationalised bank for cleaning out at least Rs 1.5 crore from the accounts of customers.

Indian Overseas Bank senior manager M Paasuramamoorthy, 57, of Karpagam Garden in Adyar, siphoned off funds from an NRI's fixed deposit and those of two other customers to cover up the first offense, investigators said.

As manager of IOB's Rajapalayam sub-branch, Parasuramamoorthy used a fake demand draft to withdraw money from the fixed deposit of A K D Kumar, who is based in the United States and had given his brother Venkatramanaraja authority to manage his accounts in his absence.

Parasuramamoorthy then received a transfer to IOB's main branch in Rajapalayam where he was posted as senior manager. Shortly after this, Venkatramanaraja asked Parasuramamoorthy, who had been handling his brother's accounts, to renew the fixed deposit and transfer it to the main branch.

Since Parasuramamoorthy had taken the money from the fixed deposit, he issued a fake receipt for account renewal. Venkatramanaraja then asked the bank manager to pay him the sum from other fixed deposits that had matured. A desperate Parasuramamoorthy took 80 lakh from the account of another customer, Ponnusamy, and used the money to pay Venkatramanaraja.

"Soon after this, in 2013, he took a transfer to the Adambakkam branch of IOB," an investigating officer said. "A couple of months later, Venkatramanaraja wanted to encash other deposits. But Parasuramamoorthy had pilfered from them so he took 61 lakh from the account of another customer, Gomathy, in the Adambakkam branch."

As the bank manager's fraudulent schemes unravelled, the Rajapalayam police received a complaint from Ponnusamy and booked a case of cheating against Parasuramamoorthy. Investigations by CCB revealed that the manager was guilty of multiple offences. Investigating officers are interrogating Parasuramamoorthy to see if he cheated other customers.

An Alandur court has remanded Parasuramamoorthy in judicial custody.

Bank frauds rising: Double to Rs 6,212 cr in 2012-13

Mumbai,Ramkumar :BL ;Nov. 22: 2013 

Public sector banks main victims of poor appraisal systems

Bank loan frauds almost doubled in 2012-13 adding up to Rs 6,212 crore against Rs 3,183 crore in the previous year. Public sector banks accounted for a chunk of these frauds. In terms of numbers, 349 cases of fraud of over Rs 1 crore were reported in 2012-13 up 28 per cent over the previous year’s 273 cases.

A fraud is an act or omission intended to cause wrongful gain to one person (in this case, the borrower) and wrongful loss to the other (the bank), either by way of concealment of facts or otherwise. 

In a recent presentation, RBI Deputy Governor K. C. Chakrabarty said poor credit appraisal and low level of promoter equity have led to a jump in the number of loan related frauds, especially diversion of funds. Loan related frauds accounted for 64 per cent of the money misappropriated followed by technology related and know-your-customer (mainly in deposit accounts) frauds.

There has been a 15-fold rise in large value fraud cases involving amounts of Rs 50 crore and above, from three cases in 2009-10 (involving an amount of Rs 404 crore) to 45 cases in 2012-13 (Rs 5,335 crore).

Chakrabarty observed that loan appraisal standards are lax for bigger loans both at the time of sanction and restructuring even as the assessing standards are stringent for smaller borrowers.

Loan appraisal must focus on the quantum of equity brought in by the promoters, the source of the equity, and the contingency planning in respect of infrastructure projects. According to Chakrabarty, “Increase in cases of large value fraud in accounts financed under consortium or multiple banking arrangements, involving even more than 10 banks at times, is a newly emerging, but unwelcome trend in the banking sector. Another glaring issue in this context is the considerable delay in declaration of frauds by various banks in cases of consortium/ multiple financing.”.

He pointed out that the RBI has come across cases where there is a lag of 12-15 months in declaration of the same case as fraud by different banks. This not only enables the borrower to defraud the banking system more, but also gives him time to erase the money trail and queer the pitch for the investigating agencies.