Two employees of Paytm Payments Bank have been arrested by Noida Police for allegedly misusing their official access to unfreeze accounts linked to cyber fraud, releasing nearly ₹30 lakh without legal sanction, officials confirmed on Tuesday.
The accused, Chandresh Rathore and Tariq Anwar, reportedly acted in direct violation of legal procedures, releasing funds from accounts frozen during ongoing cybercrime investigations. Their actions bypassed due process, as no permissions were obtained from investigative agencies or courts before releasing the funds.
The probe was triggered in August 2023 after Paytm Payments Bank itself filed a complaint, suspecting internal malpractice. According to Additional Deputy Commissioner of Police (Cyber) Shavya Goyal, the bank raised alarm after detecting multiple unauthorized unfreezing instances by employees.
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Modus Operandi: A Collusion with Intermediaries and Fraudsters
According to police sources, the accused employees were working in collusion with an intermediary who maintained contact with account holders whose accounts had been frozen due to suspected cybercrime activity. These account holders, often linked to ongoing fraud probes, allegedly paid bribes to the accused in exchange for defreezing their accounts.
“The accused would receive payment to release the funds and unfreeze accounts under investigation,” said Senior Police Officer Vivek Ranjan Rai. Investigators believe this illegal operation had been running for several years before it came to light.
This case raises questions about the internal oversight mechanisms at Paytm Payments Bank, especially when it comes to handling accounts flagged by law enforcement. It also highlights the need for tighter monitoring of employee access privileges, especially in cases involving financial crime.
Larger Internal Scam Suspected, More Arrests Likely
Another senior officer investigating the case said that more employees of Paytm Payments Bank could be involved in the racket. Digital and financial footprints are currently under review to identify any additional links and beneficiaries of the illegal unfreezing operations.
Investigators are now tracking the transaction logs, communication records, and internal authorization trails to build a broader picture of the network. Sources suggest that the scam may have been facilitated by systemic vulnerabilities and lapses in protocol adherence within the bank’s operations unit.
The accused have been booked under relevant sections of the Indian Penal Code and the Information Technology Act, and were produced before a magistrate for judicial custody.
This incident adds to growing concerns over insider threats in the fintech and digital banking sectors, particularly as cybercrime cases continue to rise in India. Regulators may now push for stricter internal compliance audits and real-time fraud detection systems across digital banking platforms.