RBI cautioned on invest account fraud, banker jailed for 3 yrs

Special judge Anoop Kumar Mendiratta gave this direction while sentencing suspended Syndicate Bank clerk Praveen Kumar Gupta to three years in jail for diverting over Rs 37 lakh to his accounts by fudging various stock investment accounts and other security instruments with the bank over 12 years ago.

The court issued directions to the RBI, terming the fact of the case, unearthed by investigative agency during its probe, as "tip of the iceberg".

"The mode adopted by the accused for fraudulent multiple encashing of the same instrument despite maintenance of balancing book in the bank calls for deeper analysis as the same could not have been possible but for want of complete lack of supervision or abdication of duties by senior officials," said the court.

"Appropriate guidelines need to be formulated by RBI Governor to be followed by all the banks which may work as benchmark to check the commission of frauds in similar schemes. It is necessary to ensure proper conciliation and accountability of banking transactions by the employees in such schemes," it added.

The court also ordered for sending a copy of its judgement to the RBI Governor "for compliance".

The court direction came in a case involving falsification, manipulation and tampering of stock investment accounts, ledgers and stock invest instruments by Gupta between 1992 and 1997 to siphon off over Rs 37 lakh.

Gupta, 55, handled the work relating to stock invest department since the inception of stock invest scheme in June 1992 till August 5, 1997.

He opened nine stock invest accounts in his and his family member's name at bank's Asif Ali Road branch and then merged them against the rules.

He also issued numerous stock invest instruments, manipulated bank records and paid inflated interest on surrendered stock investment instruments or outstanding credit balances and dishonestly induced bank to credit money to these accounts.

Thousands of transactions running into several lakhs were made through these accounts with Gupta making multiple debits against a single credit to these accounts and even paid interest on the single credit, while diverting the funds to his own accounts.

The CBI had filed 10 charge sheets against him on charges of theft of stock investment instruments, encashing the already encashed instruments, falsification of account and criminal misconduct by public servant.

The court said Gupta "on the face of record, misused his position for fraudulently encashing the stock invest instruments which had already been encashed and further made incorrect entries in the stock invest account for wrongly gaining the amount.

"He (Gupta) instead of ensuring that the funds of the public were not misappropriated, himself resorted to misappropriate the same by fraudulent multi-fold encashment of the same instrument."