Big Fraud by Kotak Mahindra Bank Manager! Rs.31 Crore Stolen from Account of Bihar Govt

In a shocking case of financial fraud and identity misuse, a former branch manager of Kotak Mahindra Bank has been accused of embezzling over ₹31 crore from the Bihar government’s District Land Acquisition Officer (DLAO) account. The stolen money was allegedly laundered through foreign countries and used to fund illegal online gambling and betting activities via banned apps in South Africa and the Philippines.

According to police and Enforcement Directorate (ED) officials, the ex-branch manager, whose name has not been officially disclosed again in the recent case, used his position in the bank to forge cheques and withdraw funds from the DLAO’s account. The fraud went undetected for nearly two years, during which he allegedly misused his authority to verify signatures, allowing him to approve forged cheques himself.

Police say he was battling an addiction to online gambling and needed money to continue placing bets. To avoid being caught, he opened 21 foreign bank accounts using the Aadhaar and KYC documents of unsuspecting bank customers, without their knowledge or consent.

In order to hide his identity in the transactions, the branch manager used personal information of Kotak Mahindra Bank customers to open multiple accounts in their names. These accounts were then used to move money abroad and fund gambling through foreign betting platforms like Betway (South Africa) and 12Bet (Philippines) — both of which are banned in India.

“It was a calculated and well-planned scam,” said Manavjit Singh Dhillon, IPS officer and DIG of the Economic Offences Unit (EOU), Bihar Police. “By using other people’s documents, the risk fell on innocent customers, not on the fraudster himself. We are currently investigating how many customer identities were misused.”

He also added that the fraudster used money mules — people who allowed their bank accounts or UPI IDs to be used in exchange for money — to further mask the origin and destination of the stolen funds.

How the Fraud Was Caught

The scam came to light in 2021, when a man named Shubham Kumar Gupta was caught attempting an unauthorized RTGS transfer using the forged signature of the DLAO. A junior employee in the bank grew suspicious and reached out to the DLAO for verification. The officer denied authorizing any such transaction, which led to the immediate filing of a case.

An investigation was launched, and the bank terminated the branch manager’s employment. He was arrested, produced in court, and later released on bail.

While the initial case focused on forgery and embezzlement, the Enforcement Directorate (ED) later began looking into the money laundering aspect of the scam. Under the Prevention of Money Laundering Act (PMLA), 2002, only the ED can probe such cases.

In its probe, the ED found that:

• The stolen money was transferred through multiple fake and real accounts,
• The funds were sent to foreign gaming entities,
• And all of this was done using forged documents and stolen identities.

The ED then shared its findings with the Bihar Police, who were the first to investigate the scam. Based on the ED’s findings, the Bihar Police registered a second case against the former branch manager on June 27, 2025.

Dhillon clarified,

“If any agency discovers a fresh cognizable offence during investigation, a second case can be filed. That is what we have done now.”

No Official Comment from Kotak Mahindra Bank

Despite being directly affected and having customers’ personal data misused, Kotak Mahindra Bank has not released an official statement on the matter. Authorities say they are waiting for the bank’s cooperation in identifying all affected customers and helping them recover their identity and security.

This case raises serious concerns about internal controls within banks, especially when a branch manager can operate unchecked for years, forging documents and misusing customer identities. While the main accused is currently out on bail, the investigations by EOU and ED are ongoing and more arrests or charges could follow.