Officials swindle co-op bank, on the run

BANGALORE: Four officials of a rural cooperative bank swindled the institution of Rs 1.56 crore, by availing of loans through fake Self Help Groups (SHGs). 

The four men, working for the Bangalore Rural and Ramanagaram District Cooperative Bank, took advantage of a microfinance scheme of the government involving a Nabard loan. They formed 32 fake SHGs for this purpose. Only recently, the bank manager realized that they were fabricated by the employees. 

Facing charges of misappropriation of funds, the foursome is now absconding. CCB sleuths, who are probing the case, are on the lookout for the bank's loan section branch manager B K Puttaramaiah, in-charge manager of Kanakapura branch H Krishna, field superintendent K N Swamy Gowda and Chennagiriappa of Agriculture Cooperative Bank of T Hosahalli. 

The fraud comes at a time when the unregulated microfinance industry is facing a crisis by way of high interest rates and low repayment of loans. 


The case came to light when officials from Nabard asked for a clarification from in-charge manager of Bangalore Rural Cooperative Bank Ramakrishnan. "He was surprised as he had not sanctioned any loans to SHGs, and was shocked to see documents carrying his signatures, which were forged," said a CCB police officer. 

He lodged a complaint with Central police station, which was transferred to CCB. "Close family members are pleading with us not to arrest the accused and offered to return the money on their behalf. But the four will not be spared,'' a senior CCB police officer said. 

MODUS OPERANDI 

Nabard had sanctioned a loan for SHGs, at a rate of 3% monthly interest. "The accused registered fake SHGs and documents and availed of the loan under fictitious names. First, they created 20 fake SHGs and availed of Rs 97 lakh in loans. A couple of months later, they created 12 more fake SHGs and got Rs 59 lakh. The documents showed the SHGs as existing in Kanakapura and Ramanagaram areas,'' the official added. 

HOW SHGs WORK 

A Self-Help Group is a registered or unregistered group of micro entrepreneurs, largely involving 10-12 rural women, who voluntarily come together to regularly save small sums of money, and mutually agree to contribute to a common fund and meet their emergency needs on the basis of mutual help. Many of these under Nabard's SHG-bank-linkage programme borrow from banks once they have accumulated a base of their own capital and established a track record of regular repayments.

courtesy : The Times of India