Recently, a big case of gold loan fraud has come to light in Bank of India. 28 people submitted 3.5 kg fake gold in Bank of India Saraidhela branch and took Rs.1.24 crore loan from Bank. Police Case has been filed against the borrowers, gold valuer and business correspondent involved in this fraud.
The matter came to knowledge when the accounts turned NPA and the gold against loan was re-valued. The branch officers were shocked to know that the gold kept in safe custody was fake. The senior branch manager, Vishwa Pratap Singh, lodged an FIR at the Saraidhela police station.
Loans were given against fake jewelry from 2022 to January 2023. Soon the loan accounts turned NPA as borrowers did not deposit their loan. In response to the situation, the bank issued notices to the loan holders for the recovery of the outstanding amount. The loan holders were warned that their jewelry would be auctioned if the loan installments were not deposited. However, the bank officials were surprised when the loan holders did not comply with the notices.
As a result, a committee was formed to open the sealed packets of mortgaged jewelry. Videography was done and the jewelry was re-evaluated. On re-evaluation, it was found that the jewelry was indeed fake.
In March, the Reserve Bank of India had asked banks to share with it information on frauds reported in gold loans, actions taken by them to recover the money and defaults in the portfolio.
The RBI also asked banks to review their lending processes to check if they are in compliance with the regulator’s gold loan guidelines. The RBI sought this information after it found that employees of two state-run banks manipulated its system to meet gold loan targets.
