Canara Bank Officer Arrested for creating Fake Gold Loan Documents

The District Crime Branch police in Perambalur arrested a Canara Bank officer on Sunday for creating fake documents for gold loans and cheating the bank out of ₹1.2 crore.

The officer, Akash Chauhan, is 29 years old and comes from Udaipur in Rajasthan. He was working in the Gold Loan section at Canara Bank’s Labbaikudikadu branch in Perambalur district.

According to the police, Akash joined the bank in May 2022. During his time there, he created fake gold loan papers in the names of five customers. Instead of giving the loan money to the customers, he transferred the entire amount — ₹1.2 crore — into his own bank account.

The fraud was discovered after a complaint was filed by N. Loga Krishnakumar, a 46-year-old Assistant General Manager from the Canara Bank regional office in Namakkal. After investigating the complaint, the District Crime Branch confirmed the fraud and arrested Akash Chauhan. Click here to read more news.

A press release by the police confirmed that Akash had misused his position to steal money from the bank by faking documents and cheating the system. Click here to read more news.

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Gold loan fraud is a serious threat to the credibility of banks and NBFCs (Non-Banking Financial Companies). While gold loans are a valuable financial tool for millions, increasing fraud cases highlight the urgent need for stronger checks, transparency, and accountability in the system.

How to Control Gold Loan Fraud?

Gold loans have become a popular and fast-growing form of lending in India due to their quick approval process, minimal documentation, and lower interest rates. However, as the number of gold loan borrowers increases, so does the risk of fraud and misuse — a troubling trend that is raising alarms in the banking and financial sector. Some ways to control Gold Loan Fraud are:

1. Stricter KYC and Documentation: Banks must ensure that all documents are verified carefully and gold valuation is done by certified experts.
2. Regular Internal Audits: Surprise audits and internal checks can help catch suspicious activity early.
3. Use of Technology: AI-based fraud detection tools, better gold testing machines, and centralized verification systems can reduce human error and fraud.
4. Staff Training: Regular training for bank staff to identify red flags and follow compliance procedures strictly.