CID to probe loans given by Shimoga DCC bank against 'fake' gold: Minister

The Criminal Investigation Department (CID) will investigate the misappropriation cases pertaining to disbursal of gold loans by the District Credit Co-operative (DCC) Bank, Shimoga, Minister for Co-operation H S Mahadeva Prasad told the Legislative Council on Thursday.

Leader of Opposition K S Eshwarappa raised the issue pertaining to the DCC Bank’s Shimoga city branch which is reported to have given loans by accepting ‘fake’ gold as collateral.

The minister, in his response, admitted that large-scale misappropriation cases had occurred in that branch. He said that on July 8, 2014, the co-operation department received an anonymous letter which alleged a lot of misappropriation in the DCC bank’s Shimoga city branch.

In a surprise inspection of the DCC branch later, the department officials found that the bank “indiscriminately” gave loans up to Rs 57.71 crore by accepting “fake” gold as collateral.

“In 486 cases, loans were given against fake gold articles, whereas in 185 other cases, loans were given just on receipts of people who claimed they had gold,” Prasad said. While the loans given on fake gold accounted for Rs 40 crore, the money lent against only receipts was Rs 17.71 crore.

According to the minister, the Shimoga city branch gave as many as 4,522 gold loans. The government has already taken action against Ravindra, the cashier of the branch who has been arrested and suspended.

“Three other conspirators in the scam, including gold evaluator Sudarshan Seth, have also been arrested,” he added.

But given the gravity of the cases, investigation into all transactions at the Shimoga city branch and the gold loans given by all the 27 branches of the DCC in that district would be conducted by the CID, he said.

Inquiry into farm loans

“Besides, the co-operation department will conduct a departmental enquiry into farm loans given by other DCC banks in the State. If cases of misappropriation are found in other banks as well, we will immediately hand over the cases to the CID,” Prasad said.