Cheque cloning in Kochi: How north Indian racket scammed banks of Rs 2.6 cr – THE WEEK

Even as banks are bolstering security at multiple levels, they are yet to plug significant loopholes especially in securing deposits and preventing fraud. In a major scam unearthed in Kochi, unidentified fraudsters siphoned off crores of rupees from various nationalised banks using cloned cheques last year.

More than Rs 2.6 crore were siphoned off in five transactions from Punjab National Bank, Central Bank of India, Union Bank of India and Canara Bank. It is suspected that a racket based out of north India could be behind the fraud. It is suspected that more banks may have fallen prey to fraud in this manner.

Modus operandi

Preliminary assessments revealed the fraud was committed by printing exact copies of the cheque leaves issued to account holders. Their signatures could also have been forged.

The money was withdrawn from the accounts in bank branches in Uttar Pradesh and Maharashtra by people from these same regions. However, the cheque was given for clearing in Kochi and nearby areas.

When money is withdrawn from the account, the account owner gets a message. However, none of the affected accounts in this case belonged to individuals. These are rather owned by institutions such as colleges, schools and societies, and thus the messages likely went unnoticed. These institutions usually check the account statements periodically.

From Faridabad to Kadavanthra

The fraud happened during August-September 2019.

The cheque issued in the name of a company for Rs 43,10,119 from the account of a consumer forum at the Punjab National Bank's Faridabad branch in Haryana was deposited in the drop box of the Central Bank's Kadavanthra branch.

The cheque was passed by the clearing house in Chennai. The money transferred was withdrawn from the account in the following days. This account owner is yet to be traced.

The consumer forum approached the bank after a month, pointing out that no cheque was issued for Rs 43 lakh. The cheque book was also presented, taking the lid off the cheque leaf cloning fraud.

In a similar manner, three cheques of the Canara Bank were used to withdraw Rs 30 lakh, Rs 40 lakh and Rs 40 lakh on various days.

Rs 1.10 crore was siphoned off from the Central Bank. The scam was unearthed after a cheque of Rs 31 lakh from the Union Bank was detected to be fake at Canara Bank's Aluva branch. Then the Canara Bank general manager sent a circular on the fraud to various branches on December 23.

Whodunnit?

It is not known whether any bank staff had colluded with the fraudsters and given details of the money in the accounts and the signatures of the account holders. Nor is it clear whether the banks have apprised the Reserve Bank of India of the fraud. The role of institutions that print cheque books on outsourcing basis is also under the scanner.

(This story was originally published in onmanorama)

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Cheque cloning in Kochi: How north Indian racket scammed banks of Rs 2.6 cr - THE WEEK