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Mother Teresa Co-op Bank chief held for fraud

Syed Amin Jafri in Hyderabad

Mother Teresa Co-operative bank chairman T Henry Charles and his wife Arpana Charles were arrested by the Hyderabad police on Wednesday on charges of cheating.

The Central Crime Station team of the city police also visited the bank premises and seized all the relevant files and documents. The bank currently has deposits of Rs 3.5 crore (Rs 35 million) and loans and advances of Rs 3.9 crore (Rs 39 million).

The bank has four big depositors: Secretariat Employees Cooperative Credit Society (Rs 1.5 million), AG Office Employees Association (Rs 2.5 million), Bank of India Employees Association (Rs 2 million) and Trinity Cooperative Bank (Rs 2.5 million).

A case was registered against the bank and its chairman and board of directors under sections 406 and 420 of the Indian Penal Code at Narayanguda police station.

The verification of cash-credit and term loan accounts revealed serious irregularities. Cash credit limits and term loans were sanctioned in the name of bogus concerns. The addresses of the concerns mentioned in the records were found to be non-existing.

In many files, even the addresses of loanees, the purpose of the loan, the loan appraisal reports were not available. In some files, the photos of loanees were not available. In one file, the photo of the loanee pasted on the application was removed later.

The securities (properties) mortgaged to the bank and the name of the loanee were different in some cases and there was no authorisation/commitment to the bank on the part of the owner of the property that was shown as security for the loan. The values of the properties mortgaged to the bank were also highly exaggerated.

Interestingly, the auditor who evaluated the properties had also taken cash-credit limit of Rs 25 lakhs (Rs 2.5 million) and the present outstanding amount in the account was Rs 32 lakhs (Rs 3.2 million). The concerns, which borrowed money from the bank did not submit even a single paper about the existence of the concern.

It was found prima facie by the CCS that most of the loans and advances were bogus and through the bogus accounts the public deposits were swindled. The role of the directors of the bank in the same is being probed, the CCS said in a statement.

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