Hyderabad: CBI Court Convicts Two Former Union Bank Managers In Fraud Case

Loans meant for the construction of independent houses were disbursed without proper borrower identification and based on falsified documents, the CBI found during investigation into the case.

A CBI court in Hyderabad has sentenced two former managers of the Union Bank of India to five years of rigorous imprisonment in a fraud case.(Representational Image)

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A CBI court in Hyderabad has sentenced two former managers of the Union Bank of India to five years of rigorous imprisonment in a fraud case. The court has also imposed a fine of Rs 75,000 each on Pillendla Phani Prasad, a former branch manager, and Chintakuntla Pandurangam Chalapathi, a former assistant manager, IANS reported.

The CBI had registered the case in 2005 against Phani Prasad, Chalapathi, and Yerram Koteswara Rao, who is the proprietor of a private company. The CBI had alleged that Rao conspired with the former managers to approve loans for 23 group housing projects.

Although these loans were meant for the construction of independent houses, they were disbursed without proper borrower identification and based on falsified documents.

Consequently, the sanctioned loan amount was withdrawn by the proprietor, with some of the funds diverted for other purposes. Moreover, some of the houses either remained partially constructed or were not built at all.

It was further alleged that the proprietor had previously received funds from other borrowers who had obtained loans from Andhra Bank for the same properties. The fraud led to a loss of Rs. 1.15 crore for Union Bank of India.

During the investigation, searches were conducted at the accused individuals' premises, which ultimately resulted in the proprietor's arrest. Subsequently, a charge sheet was filed in 2007 against the accused after completing the investigation.

Recently, a special PMLA court in Hyderabad convicted five individuals, including three bankers, of money laundering charges in a loan fraud case involving over Rs 2 crore at the State Bank of India (SBI), according to a report of The Times of India.

The accused have been handed seven years of rigorous imprisonment and a fine of Rs 50,000 each.