JK Bank loses over a 1000 Cr to frauds, 11 involved employees yet to be terminated


Jammu and Kashmir Bank has lost Rs. 1157.84 crore to 41 frauds during the last four years from 2013-14 to December 2016. However, the bank has started to regain its lost ground since the day new chairman Parvaiz Ahmed has taken the charge, reports a local daily.

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According to an official document of Reserve Bank of India (RBI), the hard-earned money of the commoners deposited in the banks has been lost by the bank not only to the VVIP customers but the employees of bank have also played active role in committing frauds worth crores of rupees. The bank on its part has stonewalled all efforts for being brought under the purview of the RTI act.


The RBI document reveals that 11 employees of Jammu and Kashmir Bank were also involved in bank having lost Rs. 1157.84 crore to 41 frauds during the last four years from 2013-14 to December 2016. The bank lost highest amount of Rs. 902.86 crore to the seven loan frauds in the year 2014-15 when the Chairman was Mushtaq Ahmed, a bank official who was known for his proximity with National Conference (NC) which was then in power.


These seven frauds were committed by VVIP customers. Though the bank claims that no official from the bank was found involved in these frauds but the fact remains that these loans were sanctioned were some of the so-called brightest Bank managers of the Bank. These included Managers of Residency Road Branch in Jammu and some other branches of Kashmir valley. During the tenure of Mushtaq Ahmed, JK Bank lost more than Rs. 1000 crore to the fraudsters.


In the year 2013-14, the Bank lost Rs. 66.2 lakh in 7 cases of fraud involving several VVIPs and 3 bank employees. This was followed by Bank losing another Rs. 86.6 Lakh to 14 banking frauds involving 6 employees of the bank, whose identity has been kept secret by the top management of the bank, says the RBI document. During the current financial year, the bank has lost around Rs. 239.69 crore to the frauds with just 2 employees being allegedly involved in this huge fraud.


According to documents accessed from the Ministry of Finance, these losses are only due to frauds of Rs 1 lakh or more. Some of these cases are being probed by investigating agencies. Reserve Bank of India (RBI) has issued Master Direction on “Frauds-Classification and reporting” vide RBI. DBS.CFMC.BC.No.1/23.04.001/2016-17 dated July 01, 2016 containing all the details/aspects relating to frauds. To compress the time taken in detection of fraud, a framework for handling loan frauds has been put in place.



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