Massive ₹30 Crore Cooperative Bank Fraud Uncovered in Guntur District
In a significant development, the Vijayawada police have registered two separate criminal cases and apprehended five key accused individuals in connection with a massive financial fraud amounting to over ₹30 crore. The scam was perpetrated at the Nallapadu branch of the Guntur District Central Cooperative Bank (GDCC Bank Ltd), revealing deep-seated irregularities within the institution.
Organised Criminal Conspiracy Involving Multiple Stakeholders
Acting on formal complaints lodged by officials of the GDCC Bank, the Nallapadu police swiftly initiated legal proceedings and launched a comprehensive investigation. This action was taken under the direct supervision and directions of Guntur Superintendent of Police, Vakul Jindal. The preliminary findings indicate a well-organised criminal conspiracy that allegedly involved bank officials, committee members, traders, and other external parties colluding to defraud the bank.
To ensure a thorough probe, the police constituted two special investigation teams dedicated to examining the intricate details of the financial irregularities. The investigation has uncovered that certain bank staff members, the then bank chairperson, committee members, cold storage owners, and chilli traders conspired together to sanction loans through fraudulent means.
Details of the First Case: Fake SHGs and Farmers
In the first registered case, investigators discovered that loans were sanctioned under various government schemes, including the District Rural Development Agency (DRDA), Mission for Elimination of Poverty in Municipal Areas (MEPMA), and JMD schemes. These loans were issued in the names of non-existent self-help groups (SHGs) and fictitious farmers. Additionally, long-term loans were disbursed in clear violation of the Reserve Bank of India (RBI) norms and guidelines.
This fraudulent activity resulted in a staggering loss of ₹22.25 crore to the Guntur District Central Cooperative Bank. The police have arrested two primary accused in this case: Devarakonda Arun Kumari, who served as the then manager of the GDCC Bank's Nallapadu branch, and Dhumawat Govind Nayak, a member of the GDCC Bank central committee. Both individuals have been remanded to judicial custody as the legal proceedings advance.
Second Case: Forged Documents and Diversion of Funds
The second criminal case revolves around the diversion of approximately ₹8.34 crore into personal accounts through the creation of forged documents. These fabricated papers falsely represented chilli stocks that were never actually stored in the designated cold storages. Using these counterfeit documents, loans were fraudulently obtained in the names of fake farmers, further exacerbating the financial damage to the bank.
Three accused have been arrested in connection with this case:
- Bachchanaboyana Ramachandra Rao, a chilli trader implicated in the scam.
- Vanukura Venkateswara Reddy, the manager of Raghavendra Cold Storage.
- Challa Shiva Nagi Reddy, the managing director of the same cold storage facility.
Ongoing Investigation and Future Actions
Police authorities have revealed that approximately 270 individuals have been identified as accused in these two interconnected cases so far. The investigation is actively continuing to trace and apprehend the remaining accused persons involved in this elaborate fraud. A major focus remains on recovering the misappropriated funds to mitigate the financial losses suffered by the cooperative bank.
This case highlights critical vulnerabilities in the financial oversight mechanisms within cooperative banking institutions and underscores the need for stringent regulatory compliance and internal audits to prevent such large-scale frauds in the future.
