Bank fraud probe nears end

SURAT, May 19: The Bank of India's Vadodara-based Deputy Regional Manager M S Dalpatia, charged with negligence in a sensational fraud case ...

SURAT, May 19: The Bank of India8217;s Vadodara-based Deputy Regional Manager M S Dalpatia, charged with negligence in a sensational fraud case that rocked the bank8217;s two Surat branches in 1994, was summoned to Ahmedabad on Tuesday.

K J Adhvaryu, clerk attached to the Gopipura branch, had allegedly defrauded the bank of Rs 1.01 crore over six years from 1988 to 1994. He had a simple modus operandi: since Adhvaryu had accounts in both the Gopipura and the Surat Main branches, he would deposit cheques drawn on the Surat M branch to his account in the Gopipura branch, prepare a debit note, make entries in the home clearing register and ensure that the debit note and the cheque never reached the Surat M branch.

In all, he deposited 71 such cheques. The cheque amount, including those in lakhs, was always credited to his Gopipura accounts, even though there was little balance in his Surat M branch account.

The fraud came to light only when the Bank8217;s statutory auditors at Mumbai, while finalising the balance sheet for March 1994, raised queries regarding unreconciled old entries of Gopipura branch from 1988 onwards.

Dalpatia, who was the Gopipura branch8217;s chief manager from June 1993, was among the 88 employees named as accused by Investigating Officer G Chandra Shekharan in his report.

Interestingly, Dalpatia was the one who had filed an FIR against Adhvaryu in the Athwalines Police Station on June 28, 1994. With his deposition before a top officer in Ahmedabad8217;s zonal office, the inquiry into the fraud by the bank has ended. Only last week, nine clerks also deposed about their knowledge of the fraud.

Chandra Shekharan has noted in the investigation report that the chief manager had failed to protect the bank8217;s interest by not ensuring prompt and proper attention of Head Office Reconciliation statements of unmatched entries for the period April 1, 1992-March 31, 1993, and from April 1, 1993 to September 30, 1993, received at the Gopipura branch in February and May in 1994 respectively.

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The statements showed debit notes raised on Surat Main branch for amounts ranging from Rs 75,000 to Rs 3,00,000 remaining outstanding since 1992. He was charged with laxity in supervision of bank transactions that allowed Adhvaryu to raise separate debit notes on the Surat Main branch violating the Bank8217;s procedure and RBI regulations.

Meanwhile, the Central Bureau of Investigation8217;s Economic Offences wing, which is conducting a separate investigation of the case, is about to file the chargesheet, according to reliable sources. Already, four clerks and one officer have been dismissed from service while three officers and one clerk were compulsorily retired. One suspended officer has since been reinstated.

The investigation report had identified 88 bank employees and 29 others for knowingly or unknowingly colluding in the fraud. Besides severe action against nine, who were charged with actively abetting and aiding Adhvaryu, punishment has been heaped on at least 60 others.