Daily wage worker booked for siphoning ₹1.04 crore in J&K Bank loan scam

Budgam’s Economic Offences Wing has filed a chargesheet against a daily‑wage worker accused of siphoning ₹1.04 crore from J&K Bank loan accounts.

The accused, employed on a contractual basis, worked in a role linked to the bank’s credit operations in Budgam, giving him regular access to loan records and digital banking tools.

The investigation found that he used forged documents and altered banking credentials to authorize multiple loan disbursements, moving the money in small batches over several months to avoid immediate detection.

Bank officials noticed irregularities in the loan statements and reported the matter to the Economic Offences Wing, which then began a detailed probe into the suspected fraud.

The Economic Offences Wing, a specialised unit within the Jammu and Kashmir police, examined the digital trails, collected evidence and compiled a chargesheet that was submitted to the local court.

The chargesheet invokes sections of the Indian Penal Code concerning cheating and criminal breach of trust, as well as provisions of the Prevention of Corruption Act, reflecting the seriousness of the alleged offense.

KCC loans are government‑backed credit facilities intended for small and marginal farmers, and their misuse can harm individual borrowers and erode confidence in the banking system.

In recent years, misuse of digital banking credentials has risen across Jammu and Kashmir, prompting the police to increase scrutiny of financial crimes in the union territory.

The Economic Offences Wing, a specialised unit of the J&K police, has handled several high‑value financial fraud matters, employing forensic accounting and digital forensics to trace illicit fund flows.

The alleged scheme exploited the trust placed in the bank’s digital platform, a vulnerability that has become more pronounced as more customers rely on online services for loan applications and repayments.

The chargesheet has been filed, and the matter will be heard in the coming weeks, with the court yet to decide on bail or further procedural steps. The bank is cooperating with the investigation and reviewing its internal controls to prevent similar breaches in the future.

The case also serves as a reminder that financial institutions must strengthen internal controls and staff verification procedures to guard against similar abuses.

The worker’s contractual status meant he was not a permanent bank employee, which made it harder to trace his actions and verify his access rights.

Investigators noted that the fraud was carried out over several months, allowing the amounts to be transferred gradually and evade detection.

The chargesheet invokes sections of the Indian Penal Code dealing with cheating and criminal breach of trust, as well as provisions of the Prevention of Corruption Act, and the case will be taken up by the magistrate in due course.

Legal experts say that once the chargesheet is filed, the accused will be produced before a magistrate, who will decide on bail and the next stage of the trial.

The bank has initiated a review of the affected accounts and is cooperating fully with the probe, aiming to strengthen its internal controls.

Authorities have warned that continued misuse of digital banking platforms could undermine public trust in financial institutions operating in the union territory.

This development highlights the growing focus on financial fraud in the region as digital banking expands, underscoring the role of specialised police units in protecting the integrity of financial institutions.

Source: Hindustan Times