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Two bank officials among fiveheld for fixed deposit fraud

The charge: they created a dummy current account to transfer KRIDL funds

The police have arrested five persons, including two officials of Indian Overseas Bank (IOB), for allegedly creating a dummy current account to transfer ₹ 55 crore fixed deposit of Karnataka Rural Infrastructure Development Limited (KRIDL) with the Kulai branch of the bank in the city.

The police gave the names of the arrested persons as Serin Madhusudhan, who is the manager of Kulai branch of the bank; Sijo, a manager in IOB’s Mangaluru Regional Office; and Mr. Madhusudhan’s friends Sunil, Jerry and Salam.

FIR

According to the First Information Report registered with the Surathkal police, KRIDL deposited ₹ 20 crore in the bank’s Kulai branch on August 24, 2017, and another ₹ 35 crore in the same branch on August 30 this year for a period of one year at an interest rate of 5.75 %. IOB had issued two bonds for the deposits to KRIDL.

The arrested bank officials have been accused of transferring the fixed deposit amount to a fake current account in the name of KRIDL from where it was transferred to other accounts. Veeranagouda Patil, Chief Finance Officer I, KRIDL, Bengaluru, filed the complaint with the Surathkal police.

During investigation, the Surathkal police found that the bank officials opened the current account in the name of Salam, who is a resident of Bantwal, by creating records to show him as an official of KRIDL. The accused made use of fake memorandum and article of association (MoA) of KRIDL, a fake board resolution and fake identity card for opening the account. The fraud came to light following an inquiry by the bank into transfer of ₹ 50 lakh from the current account to an account of an export firm in Vijaya Bank’s Koramangala branch in Bengaluru.

Suspended

Meanwhile, the government has suspended three officials of KRIDL relating to the case. This includes Mr. Patil, who filed the complaint with the Surathkal police, Deputy Finance Officer Prashanth Kumar M.V. and Superintendent (Finance) Shankarachari.