Bank manager orchestrates loan fraud to siphon off crores: 5 money tips to spot and avoid scams

The manager of a state lender was recently arrested in Lucknow for misusing documents of loan applicants to divert funds to shell companies for his personal use. The branch manager of Union Bank of India’s Jankipuram branch in Lucknow, along with a few accomplices, was arrested, reported the Times of India.

He is accused of using his official login IDs and forged documents to siphon off crores of rupees through fraudulent Mudra and auto loans. He and his three accomplices are now behind bars.

Although this was a criminal case and loan applicants must have been caught unaware, it is important for loan applicants to exercise caution when applying for a loan.

Here are some money lessons one can learn from the scam

I. Apply for loans online: It is recommended to apply for a loan online rather than submitting physical documents, which can be misused by the people who receive them.

II. When there is suspicion: If you have a suspicion about the misuse of documents, you should not refrain from reporting it immediately to the banking ombudsman.

III. Banking relationship: Typically, it is recommended to borrow from those lenders with whom you share a long banking relationship. For instance, if you have a salary account in SBI, it is recommended to approach it for a personal loan before approaching a new lender.

IV. Individuals in the bank: It is important to distinguish between a bank and its employees. Even the Reserve Bank of India (RBI) often puts out ads to inform users that customers should not share OTP with anyone, not even with the bank employees.

V. Exercise caution: It is recommended that you do your own research about the loan application process rather than relying on one or two bank employees. Everything is already shared on the lender's website.

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