The Central Bureau of Investigation (CBI) said on Tuesday it is investigating an alleged Rs1000-crore scam carried out at the public-sector Syndicate Bank by a group of businessmen, at a time when state-run lenders are struggling to deal with bad loans and financial frauds.
Officials said they searched a dozen locations in the national capital region and Rajasthan for evidence against the suspects who duped the bank with fake cheques, letters of credit and insurance policies over five years.
The fraud revealed “a shocking lack or collapse of internal due-diligence and monitoring procedures,” said a source, with several senior bank officials allegedly involved.
The development came on a day finance minister Arun Jaitley told Parliament that over three years the government ordered the Serious Fraud Investigation Office to probe alleged fraud against 196 companies.
The CBI has named five bank officials, three businessmen and a chartered accountant in its first information report. “The roles of other senior bank officials not named in the FIR are being examined too. Questioning of the accused and suspects will begin soon,” said a source.
A spokesperson of the agency said the transactions of fake cheques ranged between Rs 40 lakh and Rs 5 crore.
About two years ago, the CBI arrested the Syndicate Bank’s chairman and managing director SK Jain for allegedly accepting a bribe of Rs 50 lakh to increase the credit limit of a private company. The agency also arrested 11 others, including the chief of a Delhi-based steel company.
The CBI is also investigating allegations of money at the Bank of Baroda.