The Central Bureau of Investigations (CBI) on Tuesday carried out searches at 10 locations spread across three cities after registering a case of alleged loan fraud estimated to be around Rs 1,000 crore in the Syndicate Bank case. A senior bank official said management has suspended five employees in connection with this case. The stock fell by two per cent.
Shares of the company went down by 2.02 per cent to settle at Rs 60.55 on the BSE. During the day, it dipped 4.85 per cent to Rs 58.80. At the NSE, the stock was down 1.94 per cent to close at Rs 60.65.
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CBI sources said the searches are being carried out at 10 locations at the residences and official premises of senior executives of the bank and some private individuals allegedly involved in the scam. They said the case is of allegedly submitting fake documents for loan purposes.
It was further alleged that since 2011, bank officials at branches in Jaipur and Udaipur colluded with private persons/customers and resorted to discounting of fake cheques, fake Inland Bills and arranging overdraft limit against non-existent LIC polices. The amount involved in individual transactions ranged from about Rs 40 lakh to about Rs 5 crore but a majority of them were in the range of Rs .2.5–4 crore. To avoid detection, many of these transactions were nullified from the proceeds of new fraudulent transactions.
The sources remained tight-lipped about details as the search operation was still on at Delhi, Jaipur and Udaipur. Prima facie, the ambit of alleged fraud seemed to be domestic, CBI sources said.
Top officials at the bank did not respond to calls or text messages for the lender’s version of events. Bank employees said “Senior executives have been briefed about case with strict instructions not to speak to media and outsiders about CBI and action. Instead staff should focus improving vigilance and on recoveries ahead of financial year ending (March 2016).”