In a significant financial fraud incident reported from Karnal, Haryana, police have registered a criminal case against a resident who allegedly defrauded a gold loan non-banking financial company (NBFC) of ₹13.50 lakh. The accused, identified as Akash, a resident of Urban Estate Sector-7, allegedly tricked Manappuram Gold Loan Finance Ltd into initiating a balance transfer for an existing gold loan held with IIFL Finance. After the loan closure funds were unexpectedly refunded back into his personal bank account, the accused allegedly absconded with both the money and the pledged gold assets.
Following a preliminary inquiry and the examination of banking records, Karnal City Police booked Akash for cheating and criminal breach of trust. Investigators are currently tracing his whereabouts, scrutinizing his financial transaction trails, and examining how the pledged collateral was released without inter-institutional verification.
The Fraudulent Loan Transfer Scheme and Disappearance
The fraudulent sequence began when Akash approached the Old Vegetable Market branch of Manappuram Gold Loan Finance Ltd in Karnal, expressing his intention to transfer his active gold loan from IIFL Finance to Manappuram. He informed branch officials that his outstanding loan balance with IIFL Finance stood at ₹13.50 lakh and requested Manappuram to pay the closure amount directly as part of the standard loan transfer procedure. Believing the transaction to be legitimate, branch management approved the balance transfer agreement.
On July 29, 2026, Manappuram executed a real-time online fund transfer of ₹13.50 lakh through IndusInd Bank to the virtual account details supplied for clearing the IIFL Finance loan. Under the agreed arrangement, once the existing account was settled, the pledged gold held at IIFL Finance was to be released and re-pledged with Manappuram. However, due to administrative or technical reasons currently under investigation, the ₹13.50 lakh payment failed to settle at IIFL and was instead refunded directly into Akash’s personal bank account on July 30.
Upon learning of the payment refund, Manappuram officials repeatedly attempted to reach Akash on his mobile phone to rectify the transfer, but found his device switched off. Branch staff subsequently conducted an emergency site visit to his residence in Urban Estate Sector-7 on July 30, where family members claimed that he had left home early in the morning and had not returned. Realizing that the customer had severed all communication and vanished with the refunded capital, the branch manager lodged an official police complaint.
Police Investigation and Documentary Evidence
The formal complaint was registered by Rohit Kumar, Branch Manager at Manappuram’s Old Vegetable Market branch. During the initial inquiry, the complainant submitted comprehensive documentation to Karnal City Police, including the signed loan transfer agreement, online banking transaction receipts, dishonoured security cheques, and photographs taken during the visit to the suspect’s residence. Additionally, copies of Akash’s identification documents—including his PAN card and Aadhaar records—were handed over to law enforcement to establish the financial trail.
Police officials issued formal notices directing both parties to join the preliminary inquiry. While branch manager Rohit Kumar appeared at the police station to record his statement and verify financial statements, Akash repeatedly ignored police summonses. Based on the unrefuted documentary evidence and banking logs, Karnal City Police formally registered a First Information Report (FIR) to launch a full-scale criminal investigation.
Alleged Modus Operandi and Asset Misappropriation
According to preliminary police findings, Akash exploited the temporary payment bounce to misappropriate the funds. Investigators allege that as soon as the ₹13.50 lakh was refunded into his personal account, Akash promptly withdrew or transferred the capital, independently paid off his outstanding dues at IIFL Finance, and took physical custody of his pledged gold ornaments.
Instead of returning the funds to Manappuram or surrendering the released gold collateral as legally required under the balance transfer contract, Akash concealed the settlement from Manappuram and went into hiding. Police are currently coordinating with bank officials at both IIFL Finance and IndusInd Bank to review transaction timestamps, verify the exact mode of loan closure, and trace the movement of the physical gold following its release.
Industry Vulnerabilities in Gold Loan Balance Transfers
The Karnal case underscores critical operational vulnerabilities within the gold loan balance transfer ecosystem. In typical balance transfer arrangements, secondary lenders face significant exposure during the interim period between transferring closure funds and physically receiving the pledged collateral from the primary lender. When automated system refunds route closure capital back to a borrower’s individual account rather than a secure escrow or institutional settlement pool, fraudsters can easily intercept the funds.
Financial experts stress that lending institutions must implement multi-party verification protocols during balance transfers. Lenders are advised to establish direct, institution-to-institution confirmation channels, secure immediate physical custody or lock-in undertakings for pledged assets, and enforce strict escrow controls to prevent direct refunds to borrowers during active refinancing operations.
