SBI loan fraud in Sanathnagar: Cyberabad cops arrest 8 over Rs 4.8 crores scam

Hyderabad: Eight persons were arrested for their alleged involvement in an elaborate loan fraud at the SBI Sanathnagar Branch which resulted in the bank losing Rs 4.8 crores.

The accused include former branch manager Karthik Rai and a group of associates who colluded to exploit the bank’s lending process through fraudulent loan approvals, forged documents and illegal fund diversions.

The Economic Offences Wing (EOW) of the Cyberabad Police Commissionerate made the arrests on charges of a high-level conspiracy, including forgery, cheating and document fabrication.

One of the main accused has been identified as Karthik Rai, former SBI Sanathnagar branch manager, who facilitated the fraudulent loans for a 5 per cent commission. The other accused are Mattepally Srishanth, Pole Vishal, Dagala Raju, Sudhansu Shekhar Parida, Md. Wajeed, U Sunil Kumar, Bhaskar Goud and Amanchi Upender.

Former SBI branch manager exploited the bank’s lending procedure

The fraud came to light after Ramachandra Raghavendra Prasad Paparapatti, the manager of the Sanathnagar branch filed a complaint.

According to the complaint and the police investigation so far, it was found that the accused Karthik Rai exploited the bank’s lending process through fraudulent loan approvals, forged documents and illegal fund diversions.

Between June 2020 and June 2023, Karthik Rai allegedly facilitated unauthorised loans by approving applications backed by falsified salary slips and fake identification documents. In exchange for a 5 per cent commission, Rai misused his managerial position to approve loans without following proper verification protocols, enabling large-scale fraud.

Karthik Rai was initially arrested by Sanathnagar PS on May 20. Due to the case’s severity, it was later transferred to EOW PS for further investigation. The scheme’s ringleader, Md. Wajeed, collaborated with other key conspirators, including Dagala Raju, Sudhansu Shekhar Parida, U Sunil Kumar, Amanchi Upender and Bhaskar Goud, to execute the fraud on a large scale.

Fraud using multiple schemes

The following methods were used to commit the fraud across 67 accounts resulting in Rs 4.8 crore loan fraud:

Pretending to issue fresh loans: Karthik Rai deceived customers by claiming that their existing bank loan was being closed and that a fresh loan would be sanctioned. Exploiting their trust, he approved new loans and diverted the funds to third parties.

Diverting fixed deposits: Rai transferred the customers’ fixed deposit amounts to third parties by misleading them.

Making claims using names of the deceased: Upon a customer’s death, Rai claimed the funds without the knowledge of the deceased’s legal heirs.

Diverting investments in mutual funds: Rai lured customers with promises of high profits through mutual funds and diverted the amounts to third parties.

Falsified loan applications: Rai sanctioned unauthorised loans totalling Rs 1,02,07,400 in eight loans backed by forged salary slips and fake documents, diverting the loan amounts to third parties.

What did the EoW find during the investigation?

Coordinated fraud: Led by Md. Wajeed, the accused organised a systematic scheme to secure unauthorised loans. Dagala Raju, a loan agent, recruited individuals posing as employees of Telangana State Residential School and College for Girls. Loan approvals were obtained using falsified documents in exchange for a commission.

Fabrication of documents: Sudhansu Shekhar Parida created counterfeit salary slips and ID cards, with assistance from Amanchi Upender, who operated Match Well Xerox in Prakash Nagar, Begumpet. Bhaskar Goud, a stamp maker, provided rubber stamps to authenticate the documents.

Manipulation of loan approvals: The conspirators, with Karthik Rai’s consent, misrepresented applicants as salaried employees, allowing loans totalling Rs 1,02,07,400 to be sanctioned under fraudulent pretences.

Financial gains and fund diversions: The group collected a 30 per cent share of the loan amount, totalling Rs 30 lakhs, which was divided among the conspirators, including Rai and transferred to third-party accounts.

The role each accused played in the fraud

Mattepally Srishanth and Pole Vishal: Posed as an employee of Telangana State Residential School and Colleges for Girls and obtained a loan of Rs 15 lakhs using fake and fabricated documents.

Dagala Raju: The loan agent responsible for recruiting potential borrowers and explaining the loan scheme.

Sudhansu Shekhar Parida: Created forged documents and coordinated with Upender to make documents.

Md. Wajeed: The principal organiser who coordinated the group’s activities and facilitated meetings.

U Sunil Kumar: He assisted in recruiting applicants and obtaining fake documentation.

Bhaskar Goud: The stamp maker who supplied rubber stamps to make the documents appear credible.

Amanchi Upender: The Xerox shop owner who created forged salary slips and ID cards.

Security loopholes exposed

The organised scheme involved falsified salary slips, fabricated identity cards and manipulated documents which exposed severe breaches in verification procedures and internal controls within the bank.

A case was registered under sections 420, 409, 467, 468, 471, 477 (A), 120 (B) IPC of EOW PS, Cyberabad.