Two instances of Industrial Development Bank of India officials defrauding the bank to the tune of ₹226.79 crore by colluding with bank loan brokers, bank panel valuers and a lawyer of the bank panel came to light as the CBI registered two criminal cases against them.
In the first case, the IDBI officials — one removed from service and another retired — along with seven valuers of the bank panel and 21 bank loan brokers, allegedly defrauded the bank to the tune of ₹192.98 crore.
Among the prime accused was Battu Rama Rao of Hyderabad who worked as IDBI general manager and was removed from service. He was accused of involvement in the fraud while working as IDBI’s Basheerbagh branch (Agri-Business Group) deputy general manager in Hyderabad.
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Another officer, R. Damodaran of Tamil Nadu, who retired as IDBI Chief General Manager, was also accused of involvement in defrauding the IDBI. He was allegedly involved in the fraud while he was Regional Head and general manager of ABG, South Chennai.
The 21 bank loan brokers (also referred to as aggregator groups who help in securing bank loans) allegedly took the help of these two prime accused.
‘By colluding with the seven bank panel valuers and the two bank officers’, these brokers secured ₹192.98 crore loans in the names of 220 borrowers, according to the First Information Report issued by the CBI.
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These loans were disbursed during the period from 2009 to 2012. Eventually, the bank officials found that the documents of the borrowers were fabricated and the value of the collateral property was jacked up, the loans became Non-Performing Assets (NPAs).
The outstanding loans by the end of September 2017 were ₹445.32 crore.
Borrowers applied for bank loans for pisciculture in East Godavari, West Godavari and Krishna districts of Andhra Pradesh and Adilabad district of Telangana. It was found that no fish cultivation was taken up in any of the lands mentioned in the documents.
The loan amounts were transferred from the borrowers’accounts to their individual savings bank accounts. Later, money was withdrawn from the these personal accounts.
A separate case was registered for an alleged similar fraud in Guntur of Andhra Pradesh. In this, the then Assistant General Manager of IDBI’s Guntur branch in A.P., Chandrashekhar Harish Chennapagari, was cited as prime accused.
He was accused of defrauding the bank to the tune of ₹33.81 crore from 2010 to 2012 by issuing loans to 142 borrowers for pisciculture.
Chandrashekhar was eventually terminated from service. Along with him, bank panel valuer M. Nagaraju, bank panel advocate P. Prabhakara Rao, three brokers and three borrowers were cited as accused.