The District Crime Intelligence Bureau (DCIB), probing into the scam related to issuance of gold loans by the Shimoga District Central Cooperative (DCC) Bank, has arrested five persons, including four employees of the bank, for their alleged involvement in irregular practices.
According to preliminary investigation, the bank has incurred a loss of Rs. 68 crore owing to non-compliance with the existing rules in issuing gold loans.
It may be mentioned here that Nagabhushan, general manager of DCC Bank had lodged a complaint with Doddapet police recently, alleging large-scale financial irregularities in the Amir Ahmed Circle branch here.
ADVERTISEMENT
As the fraud was of serious nature, Superintendent of Police Koushalendra Kumar had directed the DCIB to conduct a probe.
Based on the complaint, the police on Thursday arrested Ravindra, a cashier, Shashidhar, joint custodian of gold loan section, Malathesh, a ‘D’ group employee, and Sundar Shet, a jeweller who used to assess the value of gold.
On Friday, Shobha, the manager of the branch was nabbed by the police from her relative’s residence in Holehonnur. The police have registered cases under section 406 (criminal breach of trust) and section 420 (cheating) of Indian Penal Code.
ADVERTISEMENT
Of the 4,244 gold loan accounts in the branch, the verification of documents related to 785 accounts has been completed. According to sources in the DCIB, the loan was issued to 486 persons against fake gold and 183 persons without mortgaging the gold. According to the existing rules, 75 percent of the value of the gold mortgaged should be issued as loan. The amount of loan issued for 76 persons has exceeded this limit. The police would soon complete the process of verification of the remaining 3,459 gold loan accounts in the branch.
Following these developments, hundreds of customers thronged the branches of DCC Bank in Gopala and Vinobha Nagar localities in the city on Friday and Saturday to withdraw the amount they had parked in the bank as term deposit and the gold they had deposited in safe lockers. An official of DCC Bank, on condition of anonymity, said that more than Rs. 50 lakh was withdrawn from these branches on Friday and Saturday. The police were deployed here to avoid untoward incidents.