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Ludhiana: Former bank manager booked in ₹3.9-crore loan fraud case
The accused, a former branch manager, allegedly created fake loan accounts to embezzle funds under the collateral-free loan scheme meant for small businesses
Ludhiana Rural Police have booked a bank employee for allegedly siphoning off ₹3.9 crore by misusing the Centre’s Pradhan Mantri Mudra Yojana (PMMY) at a branch of Indian Overseas Bank in Baddowal.
The accused, a former branch manager, allegedly created fake loan accounts to embezzle funds under the collateral-free loan scheme meant for small businesses.
An FIR has been registered at Dakha police station against Pankaj of Patel Nagar on the complaint of the bank’s Regional Manager, Umakanta Samal.
According to the complaint, the fraud came to light during a routine review in January 2026, when the Regional Office noticed an unusual spike in agricultural and allied loans disbursed in December 2025, far exceeding the branch’s normal pattern.
A surprise inspection conducted on January 16 revealed major irregularities, including the absence of mandatory loan documents.
Bank officials said several accounts lacked loan applications, appraisal reports, KYC documents and verification records, indicating that loans were processed without due diligence.
Investigators suspect the accused created fictitious loan accounts in the names of relatives, friends and known persons, and sanctioned loans without authorization.
Police said the funds were later diverted through RTGS transactions into the accused’s personal bank account in Haryana.
The bank has identified 22 such loan accounts involving about ₹3.9 crore, with an outstanding amount of over ₹3.88 crore.
In its complaint, the bank described the fraud as “systematic, continuous and pre-planned,” involving misuse of official position and manipulation of records. The accused has been placed under suspension.
Deputy superintendent of police (Dakha) said a case has been registered under Sections 316(5) and 318(4) of the Bharatiya Nyaya Sanhita and further investigation is underway to trace the money trail and identify any accomplices.
