A new fraud worth Rs 353 crore has been detected in the Bengaluru branch of Jammu and Kashmir Bank (JKB). The Anti Corruption Bureau (ACB) of Jammu and Kashmir on Friday registered a case against the management and the officials of the J&K Bank, along with Anish Rawther of Rawther Spices after conducting the raids in the city. The anti-graft body was investigating the case since June this year.
"Anti Corruption Bureau, J&K registered a case vide FIR 17/2019 under section 5(1)(d) read with section 5(2) J&K Prevention of Corruption Act 2006, 120-B RPC at police station, ACB (CK) against management, officers & officials of the J&K bank along with beneficiary involved in financial irregularities/loan fraud worth 352.72 crore," the ACB said in a statement.
During verifications, it came to fore that the management at the corporate headquarters/ Zonal Office Bengaluru and officers/officials of J&K Bank Branch, Infantry Road, Bengaluru which has given loans worth crores of rupees to one firm namely SA Rawther Spices bypassing all norms and procedures, the ACB said.
ACB said that Syed Mohd Rawther established the company in the year 1985 and was dealing in import and export of spices and coffee. During 2002, the company is said to have approached J&K Bank's Infantry Road branch in Bengaluru for the obtainment of loan from the said bank and the bank initially sanctioned loan amount of Rs 2 crore against collateral security of three properties valued at Rs 10 crore. In the subsequent years i.e. from 2012 onwards the bank increased limits of different types of loans enormously which went up to Rs 308.13 crore in 2015 against increased mortgage/security value to Rs 147.43 crore only, the statement by ACB said.
The ACB said that the former branch head of Infantry Road branch -- Shamim Ahmad Haji -- of the J&K Bank had facilitated approval by J&K Bank headquarters against collateral property highly disproportionate to the loan amount. Haji, according to the ACB, had also dropped three prime properties as collateral in lieu of the non-marketable properties. "In connivance with MD of the company Rawther managed to valuate these exchanged properties at higher price justifying the release of prime properties valued higher than exchanged properties," the ACB said.
The said officer of the bank was awarded the promotion by the bank's ousted chairman Parvez Nengroo, under the sealed cover, despite the bank's legal officer demanding inquiry against him relating to the case, the documents accessed by DH revealed.
The state government, that owns 60% of stake in the bank, sacked the bank's former chairman Nengroo abruptly over growing charges of corruption and nepotism. The government, in a bid to contain corruption in the bank, is also planning to merge the bank with State Bank of India.