Mudra Compass

SBI branch manager and associates arrested in Hyderabad over Rs 175 crore fraud

The branch manager of State Bank of India (SBI) in Hyderabad’s Shamsheer Gunj area has been arrested, along with his associates, for their involvement in a fraud case amounting to Rs 175 crore. Reports indicate that the manager, Madhu Babu Gali, 49, conspired with fraudsters to siphon off the sum from the bank. According to NDTV, Gali facilitated the opening of current accounts, enabled the withdrawal and diversion of funds, all in return for commissions, as confirmed by officials at the Cybersecurity Bureau Headquarters in Hyderabad.

Gali, along with gym trainer Upadhya Sandeep Sharma, 34, have now been apprehended for their involvement in the Rs 175 crore scam. The case came to light after the Cybersecurity Bureau’s data analysis team identified a series of complaints on the NCRP portal related to six bank accounts at the branch. Upon further investigation, they found that large amounts of money had been transacted through these accounts during March-April 2024, a period of just two months.

Around 600 complaints have been linked to these accounts, which were allegedly connected to the main fraudster, operating from Dubai, and five other accomplices. These individuals reportedly manipulated impoverished people into opening bank accounts, which were then used for cybercrimes and hawala operations in exchange for commissions.

On August 24, the Cybersecurity Bureau arrested two more individuals, Mohammed Shoeb Tauqeer and Mahmood Bin Ahmed Bawazir, for their roles in the Rs 175 crore fraud. Shoeb was instrumental in opening the fraudulent bank accounts and preparing the necessary documents, as per reports. Once the accounts were opened, the account holders’ signatures were obtained on cheques, which were then held by one of the associates. Following the instructions of the main fraudster, some of the stolen funds were sent to Dubai via cryptocurrency after being withdrawn from these accounts.

IDBI Bank manager sentenced for fraudulent trading, resulting in ₹56.81 lakh loss

A sessions court on Wednesday sentenced an IDBI Bank manager to one year of imprisonment for conducting Exchange Traded Currency Option (ETCO) transactions for personal gain, resulting in a ₹56.81 lakh loss to the bank. The convicted manager, Chandrahas Praveen Sampat, was appointed as a derivatives trading dealer in 2007 and was responsible for executing transactions on behalf of the bank in the ETCO segment. On May 26, 2012, Sampat opened a Currency Option Account with M/s. Share Khan Ltd. after receiving approval from the bank, linking it to his personal savings account at IDBI Bank’s Sion Branch in Mumbai.

The case came to light on January 16, 2023, when the National Stock Exchange Ltd. (NSE) informed IDBI Bank of suspicious trading activities in the bank’s ETCOs, particularly transactions executed by a dealer with the same counterparty. Upon investigation, the bank discovered that Sampat was responsible for these irregular trades. He had conducted and later reversed trades in which he acted as both the buyer and the seller, generating profits for himself and causing financial harm to the bank. These trades were executed through his personal account.

When confronted by bank officials, Sampat admitted in writing to conducting these trades between his personal account and the bank’s account. On February 6, 2023, Sampat disclosed to the bank that the estimated loss amounted to ₹56,81,575. The investigation revealed that between November 9, 2012, and January 18, 2013, Sampat had executed 36 contracts across 23 trading days. In his role as a bank dealer, he manipulated ETCO transactions, buying contracts from the bank at lower premiums through his personal account and selling them back to the bank at higher premiums. Conversely, he also sold contracts at higher premiums through his personal account and repurchased them at lower premiums, exploiting his position for personal benefit.

An internal committee at the bank reviewed these transactions and concluded that the total loss amounted to ₹65,40,856.35. Sampat reimbursed ₹62,91,094 to the bank and requested that the remaining ₹2,49,906 be deducted from his Provident Fund (PF) contributions to cover the full loss. After a thorough investigation, which included collecting extensive oral and documentary evidence, a charge sheet was filed in court by the investigating officer.

Conclusion

Recent cases involving managers from SBI and IDBI Bank highlight significant breaches of trust and misuse of authority within India’s banking system. Both cases—one involving a Rs 175 crore fraud and the other causing a loss of ₹56.81 lakh—demonstrate the need for stronger internal controls and oversight to prevent such large-scale financial misconduct.