Canara Bank has dismissed a former branch manager and nine other employees following the detection of alleged financial irregularities involving Self-Help Group (SHG) loans worth around ₹14 crore at two branches in Tamil Nadu’s Theni district. The alleged fraud involved claims of forged documents, fabricated beneficiary records and unauthorised loan sanctions, following which police have initiated a criminal investigation.
According to preliminary findings, the former branch manager, identified as Karthik, allegedly played a key role in irregularities reported at the Odaipatti and Koolayanur branches. An internal audit initially detected suspected unauthorised transactions amounting to nearly ₹12 crore at the Odaipatti branch, while further scrutiny revealed additional alleged irregularities of around ₹2 crore at the Koolayanur branch.
Fake SHG Accounts Allegedly Used for Loan Sanctions
The bank’s internal inquiry alleges that Karthik created fictitious beneficiary profiles and used forged documents to sanction revolving funds and loans meant for women’s Self-Help Groups and self-employment schemes.
Investigators suspect that several loan accounts were opened and operated using fabricated records instead of genuine beneficiaries. The alleged transactions involved accounts created without the participation of actual beneficiaries, according to the preliminary investigation.
As the inquiry progressed, bank officials examined records from both branches and suspected the involvement of multiple employees in the alleged irregularities.
Nine More Employees Dismissed After Internal Probe
A detailed review of banking records allegedly revealed the involvement of nine additional staff members. Following departmental proceedings, Canara Bank dismissed all ten employees, including the former branch manager.
The criminal investigation began after a complaint was filed by Canara Bank Regional Manager Indira. Police are examining loan sanction documents, beneficiary details, transaction records and other financial evidence to determine the extent of the alleged fraud.
Authorities are also investigating whether any additional individuals were involved in the suspected irregularities and whether the alleged fraudulent accounts affected genuine customers.
Police Probe Underway Into Financial Loss
The investigation is continuing at both the bank and police levels. Officials are assessing the total financial impact of the alleged fraud and examining possible recovery measures.
The branches involved primarily serve farmers, small traders and daily wage earners, and authorities are verifying whether legitimate customers faced any financial difficulties due to the alleged irregularities.
Further legal action will depend on the findings of the investigation. The accused individuals will be subject to due process, and any criminal liability will be determined based on evidence presented before the competent authorities.
