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Gold Loan Scam: Clues Point to More Muck

An inquiry into the financial irregularities in the city branch of the District Central Cooperative (DCC) Bank by the local police is leading to shocking revelations.

Published: 26th July 2014 07:54 AM  |   Last Updated: 26th July 2014 07:54 AM   |  A+A-

SHIMOGA: An inquiry into the financial irregularities in the city branch of the District Central Cooperative (DCC) Bank by the local police is leading to shocking revelations.

The clues collected so far are pointing to the involvement of the bank higher-ups in  a scandal worth more than Rs 100 crore in the name of disbursing loan on gold.

In certain cases, the gold loans were given on fake gold and this has raised  suspicions about the bank’s entire financial transactions.Of the total 4,522 accounts of gold loan, the police have investigated only 785 accounts and found fraud in more than 60 per cent of these accounts.

The loans were given on the basis of receipts for 185 accounts without gold. Whether the bank has given these loans without gold is yet to be ascertained. Also police suspect the loans may have been given to bogus account holders or the bank may have misused  customers’ gold.

Meanwhile, Cooperative Minister H C Mahadevappa, while answering in the Legislative Council, had admitted that there were irregularities to the tune of Rs 40 crore where loans were given by keeping fake gold ornaments and Rs 10 crore was advanced without taking ornaments as guarantee.

He said the CID will investigate the fraud in the city branch and all other non-farming loan transactions in all the 28 branches of the DCC Bank in the district.

A police source said the documents and the statistics point to fraudulent transactions and creation of fake accounts.  They suspect that a wide network is behind the scam. 

Ex-CM Involved in  Hush-up Bid?

A case was filed at the Doddapet police station on the financial irregularities in the branch on July 17. When the police started the inquiry, they found that this was a big scandal and SP Koushalendra Kumar himself took personal interest and handed it over to the district crime branch. Before the crime branch team headed by CPI Jairaj started its investigation, efforts were made to cover up the issue. The bank management reportedly tried to cover up the issue through a former chief minister of the state. After this, the people involved in the scam also tried to prevail over the local police but failed. 

Manager Held in Davangere

Shoba, the branch manager and the main accused in the case, was arrested in Davangere on Friday.

 A source said she had tried to cover up the incident after she realised that it had gone out of control. She first got admitted to a private hospital and managed to escape when the police reached the spot.   

Meanwhile, her parents tried to hush up the incident by giving over Rs 1 crore to the DCC Bank. But the police, traced her whereabouts and arrested her at her relative’s house in Davangere.

With this, the number arrested in connection to the fraud rose to five. 



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