ED searches 6 locations in AP, Telangana for probe into fraud loans under KCC

East Godavari: The Directorate of Enforcement (ED) conducted search operations at six locations in Andhra Pradesh and Telangana on November 29 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, investigating allegations of fraud in the sanction of loans under Kisan Credit Card (KCC) to farmers for the construction of fish tanks.

The searches were conducted at the residences and office premises of loan aggregators which resulted in the recovery and seizure of digital devices and incriminating documents revealing numerous immovable/movable properties acquired from the proceeds of crime.

The ED initiated investigation based on an FIR registered by CBI and ACB, Visakhapatnam under various sections of the Indian Penal Code, 1860, and Prevention of Corruption Act, 1988, alleging large-scale fraud at IDBI Bank, Rajahmundry Branch in East Godavari District, Andhra Pradesh in connection with processing and sanctioning short term loans /KCC to farmers of fish farming/pisciculture for the construction of ponds/tanks.

Accused took benami loans

The ED investigation revealed that the accused persons took KYC documents, blank cheques etc. from their employees, known persons, farmers etc. on the pretext of salary payment through banking channels, medical reimbursement, provident fund, etc.

Using the same documents, they took loans in their names to the tune of Rs 311.05 crores with the connivance of bank officials and valuers. The loan amounts credited into the accounts of workers, farmers, etc. were transferred to the accused persons’ accounts and in many cases, the entire loan amount was withdrawn in cash. The accused persons thus acted as loan aggregators and ultimately used the loan amounts for their gains including investment in their businesses and acquisition of properties in the names of family members and other persons.

Further investigation is in progress.