Bank Gold Appraiser Arrested for Rs 5.21 Crore Loan Fraud in Odisha
In a significant crackdown on financial misconduct, the Economic Offences Wing (EOW) of the Odisha Crime Branch has arrested a gold appraiser from a leading public sector bank for allegedly orchestrating a massive loan fraud amounting to Rs 5.21 crore. The arrest was made in Bhubaneswar on Wednesday following a tip-off, marking a crucial development in the investigation into the misappropriation of funds through fraudulent loan sanctions.
Details of the Alleged Fraud
The accused, identified as Prashanta Kumar Mallick, served as a senior associate and cash in-charge at the bank's Balichandrapur branch in Jajpur district. According to EOW officials, Mallick had been absconding since July 14, 2025, after his illegal activities were uncovered. During the arrest, authorities seized numerous incriminating documents, a mobile phone, passbooks, and credit/debit cards from various banks, which are expected to provide further evidence in the case.
The fraud came to light through a complaint filed by the bank on February 10, which alleged that Mallick, who had been posted at the branch since June 1, 2022, manipulated gold loan accounts between October 2024 and July 2025. The total amount involved in the scam is reported to be Rs 5,21,42,000, spread across 105 loan accounts.
Modus Operandi and Investigation Findings
EOW investigations revealed a sophisticated scheme where Mallick bypassed standard banking protocols. Of the 105 gold loan accounts, 31 were backed by fake ornaments, while 74 were sanctioned without any collateral whatsoever. Key procedural lapses included missing documentation, forged borrower signatures, and absent goldsmith valuation reports, which are mandatory for such loans.
Mallick was entrusted with critical responsibilities, including appraising ornaments, verifying documentation, recommending loans, and maintaining custody of pledged gold. However, the bank's complaint highlighted that none of the required procedures—such as verification by empanelled goldsmiths and execution of pledge documents—were followed, enabling the fraud to proceed undetected for months.
Discovery and Aftermath
The fraud was stumbled upon during a routine inspection by a senior bank official on July 14, 2025. When Mallick failed to produce loan files during this inspection, he absconded without notice, prompting the bank to conduct an immediate audit and internal investigation. This led to the filing of the complaint and the subsequent EOW probe.
Further investigation uncovered that Mallick allegedly siphoned off the loan amounts by diverting funds into his personal and intermediary accounts. Even during his mandatory leave from November 27, 2024, to December 7, 2024, he illegally accessed the bank's core banking system using another official's credentials to process two additional fraudulent loans, demonstrating a brazen disregard for security protocols.
Ongoing Probe and Broader Implications
The EOW is also probing the possible involvement of other bank staff, including a former service manager who shared joint custody of pledged gold with Mallick. This aspect of the investigation aims to determine if there was collusion or negligence that facilitated the fraud.
This case underscores vulnerabilities in banking systems and highlights the need for stricter oversight in loan processing, particularly in sectors involving high-value collateral like gold. Authorities are continuing their efforts to recover the misappropriated funds and ensure accountability, with the arrest serving as a warning against financial crimes in the banking sector.
