What began in mid-November as a single complaint about missing fixed-deposit funds has escalated into a far-reaching probe into Standard Chartered Bank’s priority banking unit in Bengaluru. According to people familiar with the matter, investigators are now examining whether at least ₹80 crore belonging to several high net worth individuals was diverted from accounts held at the bank’s MG Road branch.
The trigger was a customer who reported that ₹2.7 crore earmarked for fixed deposits had vanished. That complaint prompted internal scrutiny at the bank and, soon after, a police investigation. As the scale of the suspected diversion grew, the Karnataka government ordered that the case be transferred from the Bengaluru City Police to the state’s Criminal Investigation Department, citing the magnitude of the alleged fraud.
One Employee, Many Accounts, and Forged Paper Trails
Standard Chartered has acknowledged that irregularities were identified involving a single employee at its Bengaluru branch. The employee, relationship manager Nakka Kishore Kumar, was arrested by the Halasuru police and later terminated by the bank. A local court has since remanded him to judicial custody.
Investigators allege that Kumar exploited his access to client accounts, forging signatures and rerouting funds that were meant to be placed in fixed deposits. In one instance, cheques of ₹2 crore, ₹50 lakh and ₹25 lakh—issued specifically for creating deposits—were instead transferred to third-party accounts through the RTGS system. To conceal the misuse, Kumar is said to have issued fake fixed-deposit certificates and credited fabricated interest entries to clients’ accounts.
As police expanded their inquiry, more complaints surfaced. At least five customers have now accused Kumar—and, in some cases, the bank—of similar acts, prompting authorities to contact other priority banking clients to determine the full scope of the losses.
Internal Audits, External Scrutiny, and a Familiar Pattern
Standard Chartered said it filed a police complaint as soon as the irregularities came to light and has proactively reached out to affected clients. The bank has also engaged PwC to conduct an independent investigation after a preliminary internal review flagged multiple anomalies over a fortnight.
“The interests of our customers are top priority,” the bank said in a statement, adding that it has a zero-tolerance policy for misconduct and is committed to refunding any misappropriated funds. People close to the probe said some of the aggrieved clients belong to prominent business families, heightening the sensitivity of the case.
Investigators note that the alleged modus operandi bears striking similarities to a notorious fraud uncovered at Citibank’s wealth management unit in Gurugram about 15 years ago, where relationship managers siphoned off client funds while issuing counterfeit investment documents. In the present case, police allege that the diverted money was used for speculative stock futures trading, with fake interest receipts deployed to delay detection.
A Test of Trust in Priority Banking
The unfolding investigation has raised uncomfortable questions about internal controls in private banking operations, particularly in units catering to wealthy clients who rely heavily on relationship managers to execute transactions. While banks emphasize layered checks and compliance frameworks, the case underscores how concentrated access and forged documentation can undermine safeguards.
For now, the focus remains on reconstructing transaction trails and identifying the total number of affected customers. As the CID takes over the probe and parallel internal and forensic audits continue, the case is shaping up as one of the most significant alleged priority-banking frauds in recent years—one that could influence how Indian banks rethink oversight in their most exclusive client segments.
