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Banks told to check records

india Updated: Feb 03, 2007 20:55 IST

DIRECTOR GENERAL of Police A R Pawar has advised banks and financial institutions to verify records thoroughly while making vehicle advances.

The DGP’s advice seems to have come after incidents of fictitious persons or group of persons, who availed loans posing as genuine borrowers, came to the notice of authorities.

Pawar also requested the bankers to advise their branches in Madhya Pradesh to provide necessary support and evidence to the SPs concerned as well as local police to give details of such absconding borrowers for carrying out a through investigation into such crimes. 

The DG’s letter comes as an eye opener for banks and financial institutions in the State. Now, banks have decided to adopt cautious approach while extending loan for vehicle purchase.

“It has come to our notice that certain fictitious persons/group of persons are availing loans in the guise of genuine borrowers.

The modus operandi of the fictitious borrowers is that they take a house on rent in a posh locality, procure bogus/forged documents of property and salary. Using the forged documents and by depositing the initial amount, they apply for a vehicle loan. After availing the loan and procuring vehicle from the dealer they run to another state or large city and sell the vehicle to unsuspecting persons,” said DGP’s letter.

In his letter on the issue, Pawar said, normally they sell new vehicle to a customer in collusion with middlemen by forging documents. They also resort to tampering of the vehicle registration number, engine number and even change colour and shape. “These types of transactions cause great loss to banks, financial institutions and insurance companies,” he observed.   

When contacted, DGP admitted that such incidents have started happening in the entire State. As it is a new trend, I have requested the bankers and financial institutions to remain extra cautious, he said.

“To expand their services in this age of cut throat competition, banks and financial institutions are extending vehicle loan without verifying documents,” he pointed out. Referring to such cases, Pawar said he personally came to know about such cases in cities like Bhopal and Gwalior and also got feedback about such incidents from field officers.