The Hindu : Andhra Pradesh / Hyderabad News : Police helpless against bank frauds

Online edition of India's National Newspaper
Saturday, Jan 01, 2005

Andhra Pradesh

Andhra Pradesh - Hyderabad

Police helpless against bank frauds

Lapses in system make easy the job of offenders to dupe banks, writes Marri Ramu

BANK FRAUDS constitute a considerable percentage of white-collar offences being probed by the police. Unlike ordinary thefts and robberies, the amount misappropriated in these crimes runs into lakhs and crores of rupees.

Of late, complaints of securing loans with forged documents for the purpose of housing and purchasing open lands are increasing. Though prevention of crime is an integral part of policing, sleuths are becoming helpless as the accused are duping banks exploiting the loopholes in the cumbersome procedures.

Some cases have exposed the alleged connivance of bank employees, charges of paying commission to brokers for securing loans have been levelled in a few cases and lapses in sanctioning of loans came to the fore in other cases. Incidentally, no action has been initiated against any of the bank employees thus far in any case.

Modus operandi

A classic case is the recent loan racket busted by the Uppal police in State Bank of India (SBI)'s Chikkadpally branch. The modus operandi adopted by the racketeers was interesting. A gang of four members approached owner of a newly-constructed apartment building saying they were interested in buying the flats.

The gang took xerox copies of the building documents after entering into an oral agreement of sale with the builder by paying Rs. 2 lakhs as an advance. Later, they created forged documents in the name of building's owner establishing that the latter had sold five flats to five defence employees.

Incidentally, the salary slips and other documents submitted by the loan seekers were found to be genuine. "This was made possible because the gang paid money to the defence employees to utilise their documents," says an investigator. The gang hired an impostor who executed the sale deed posing as the original building owner.

"We could not establish criminal negligence on the part of the bank manager and hence he was not arrested," say the detectives. The police learnt that the main lapse in the system is that the banks never asked for the original documents at any stage except for the sale deed for execution of which the offenders planted an impostor.

Bank rules

After receiving xerox papers (which were actually forged by the offenders) of the property, the bank passed the same on to the legal section. After scrutiny, the legal consultant told the bank that the xerox documents were `perfect' and to release loan after execution of sale deed.

The bank rules state that loan applications can be examined "even with xerox copies of documents. The alleged greediness of employees to give their salary slips and other documents on payment of some money made the job of the cheats easier.

This is not an isolated case. With a similar modus operandi, a gang cheated three banks to the tune of Rs. 1 crore in Saroornagar police station area. The police opine that unless bankers evolve a foolproof system, the offenders continue to take advantage of the lapses.

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