Man opens own bank in Tamil Nadu, cons thousands. Then, RBI gets involved

Rs 56.6 lakh in cash has been recovered from the accused. (Representative image)

A 42-year-old man has been arrested in Chennai for defrauding thousands by opening his own bank and creating 3,000 bank accounts across Tamil Nadu.

The Bank Fraud Investigation Wing of the Central Crime Branch (CCB) nabbed Chandrabose, a resident of Thousand Lights in Chennai and MBA degree from the UK, for running a fake bank -- Rural and Agricultural Farmer’s Cooperative Bank. The police recovered Rs 56.6 lakh in cash, documents, and a luxury car. They have also seized deposit slips, withdrawal slips, and cash counting machines.

Chennai City Police Commissioner Shankar Jiwal told reporters, “Our investigation revealed that the accused had fabricated a certificate purportedly issued by the RBI and opened branches of the Rural and Agricultural Farmers’ Co-operative Bank in nine places. They collected deposits under various schemes and advanced loans. Our preliminary investigation revealed that the entity might have transacted around Rs 2 crore."

He added that the investigation was based on an alert from the Reserve Bank of India.” A complaint was also lodged by an AGM of the RBI since the bank had fake RBI certificates.

“The bank had formed ‘societies’ through which they obtained credit/debit cards from ICICI Bank. The RAFC bank would then put its sticker on the cards and give them to its customers," Jiwal said.

A police officer from the Bank Fraud Investigation Wing told The New Indian Express, “The so called bank had everything that one can find in a regular bank. It collected deposits and gave out loans at rates higher than what was fixed by the RBI.”

According to The Hindu, Chandrabose had even recruited staff for branches by collecting Rs 2 lakh to Rs 7 lakh, and through them, he enrolled 2,000 members across Tamil Nadu and collected Rs 700 from each as membership fee.

"When a customer wanted to open an account, he had to pay Rs 700 as membership fee. The bank would then issue a credit/debit card to the customer with Rs 500 as balance. The card numbers would be given as account numbers," the police officer said.