Bank Fraud Case: ED Files Complaint Against Ex-Manager, Businessman
Hyderabad: Directorate of Enforcement (ED), Hyderabad, officials have filed a prosecution complaint against a former branch manager of Canara Bank N. Srinivasulu and a purported businessman M. Pratap Reddy in a bank fraud case.
The complaint was filed before the Special Court in Visakhapatnam under the Prevention of Money Laundering Act (PMLA), 2002.
The ED initiated investigation on the basis of an FIR registered by CBI, Hyderabad, under various sections of the Indian Penal Code and Prevention of Corruption Act, 1988.
Pratap Reddy and others are accused of availing produce loans in the names of farmers by fabricating documents without their knowledge.
N. Srinivasulu, the then Proddatur branch manager of Canara Bank, is alleged to have facilitated in availing the loans by fraudulent means.
Investigation revealed that Pratap Reddy, proprietor of Soami Warehouse, provided a warehouse to farmers for storing their produce. In this process, he fraudulently collected land papers, identity proofs from the farmers and used them to avail the produce loans.
Produce loans are granted to farmers to keep their produce in an approved godown/warehouse so as to enable them to sell the produce for a better price at a later date.
Pratap Reddy is also alleged to have issued fake warehouse receipts and thereafter siphoning off public money in collusion with Srinivasulu.
With the help of the bank manager, Pratap Reddy fabricated documents in the names of fake borrowers, forged their signatures and issued bogus warehouse receipts without storing any agricultural produce in his warehouse.
In connivance with the bank manager, Pratap Reddy also opened saving bank accounts in the names of farmers on the strength of forged documents and signatures. After sanction of the produce loans, the loan amounts used to be withdrawn by Pratap Reddy in the form of cash by forging the signatures of the borrowers with the knowledge of Srinivasulu.
Pratap Reddy issued warehouse receipts in the names of different persons and availed 76 loans in their names. Out of the 76 loans, stocks were not present in his warehouse in the case of 59 loans. These 59 loans became non-performing assets.
The total financial loss caused to the bank was Rs 5.73 crore. The bank entered into an OTS (one time settlement) agreement with Pratap Reddy as per which he paid Rs 4.50 crore towards clearance of the bank’s outstanding amount and Rs 1.23 crore was written-off by the bank.
The ED's investigation further revealed that Pratap Reddy paid gratification of Rs 30 lakh in cash to N Srinivasulu.
Earlier during the investigation, properties of Pratap Reddy worth Rs 1.23 crore and N. Srinivasulu worth Rs 30 crore were provisionally attached by the ED.
