A ₹11.64 crore jewellery loan fraud has come to light in Tamil Nadu’s Theni district, where a suspended branch manager of a nationalised bank has been accused of fraudulently sanctioning jewellery loans in the names of 60 customers and siphoning off the funds. The alleged scam was uncovered during a routine inspection, following which officials lodged a complaint with the District Crime Branch (DCB). The accused is currently absconding, and police have launched a search operation.
According to investigators, M. Karthik, a resident of Chinnamanur, served as the branch manager of Canara Bank’s Odaipatti and Koolayanur branches from May 29, 2023, to June 2026. During his tenure at the Odaipatti branch, he allegedly created forged jewellery loan records in the names of 46 customers. Investigators said he deliberately selected customers who had never taken jewellery loans and whose mobile numbers were not linked to their bank accounts.
Police alleged that after sanctioning the fraudulent loans, the loan amounts were first credited to the customers’ bank accounts and then immediately transferred to Karthik’s personal account at a private bank. Using this method, he allegedly misappropriated around ₹9.64 crore while posted at the Odaipatti branch.
Investigators further stated that Karthik was transferred to the Koolayanur branch on May 21, 2026, where he allegedly continued the same modus operandi. There, he is accused of fraudulently obtaining jewellery loans in the names of 14 additional customers and diverting nearly ₹1.99 crore to his personal account. Together, the alleged fraud at both branches amounts to approximately ₹11.64 crore involving 60 customers.
The scam came to light after Unnikrishnan, who took charge as the new branch manager at Odaipatti, conducted a routine inspection. During the verification process, he found a jewellery packet in the bank locker that reportedly contained no genuine ornaments. A detailed review of the related customer’s account and loan records allegedly revealed that the loan amount had been transferred to Karthik’s personal account.
Following the preliminary findings, the bank suspended the accused manager and filed a formal complaint with the District Crime Branch. Police have since begun examining financial transactions, banking records, and customer accounts while conducting searches to trace and arrest the accused.
Investigators are also trying to determine whether any other bank employee or external individual was involved in the alleged fraud. The police are scrutinising digital banking records, transaction trails, documentation, and the ultimate use of the diverted funds. If evidence of additional involvement emerges, further legal action is expected.
Banking experts say the incident highlights the importance of strong internal controls, regular audits, and continuous monitoring of customer accounts within the banking system. They stress that sensitive products such as jewellery loans require rigorous document verification, physical inspection of pledged assets, and periodic account reviews to prevent fraud. Meanwhile, police continue their investigation to trace the missing funds, identify any accomplices, and bring the accused to justice.
