Hyderabad Bank Files Criminal Complaint Over Multi-Crore Loan Fraud
In a significant development exposing alleged financial misconduct, Unity Small Finance Bank Limited has formally lodged a complaint with the Central Crime Station (CCS) in Hyderabad. The bank alleges a calculated conspiracy by five former employees that resulted in multi-crore losses to its secured lending portfolio between 2023 and 2025.
CCS police have officially registered a case against the accused individuals and initiated a comprehensive investigation into the matter. The bank's authorized representative, Ajay Kumar Punna, presented detailed allegations naming the former staff members involved.
Accused Former Employees and Their Alleged Roles
The complaint identifies five former bank officials as central figures in the alleged fraud scheme:
- Basam Nikhilesh Reddy - Former Regional Credit Manager
- Kiran Lingam - Former Area Business Manager
- Shaik Arshad Mohammod - Former Area Business Manager
- Ajay Newatia - Former Senior Regional Head
- E Sai Shravan Kumar - Former Relationship Manager
According to police statements, an internal investigation conducted by the bank's Fraud Risk Management team uncovered what they described as "serious and systemic irregularities" across multiple aspects of loan operations in the south Hyderabad zone. These irregularities reportedly spanned loan sourcing, appraisal processes, collateral valuation, and ongoing monitoring activities.
Detailed Allegations of Financial Misconduct
A CCS official elaborated on the specific allegations, stating: "As per the complainant, the accused demanded illegal gratification for loan approvals from customers and direct selling agents (DSAs) for processing and sanctioning loans. They inflated collateral valuations, sanctioned unauthorized loans, and channeled illicit proceeds through relatives and third parties."
The complaint provides detailed financial figures that illustrate the scale of the alleged misconduct:
- Kiran Lingam handled 271 accounts totaling ₹94.16 crore, with ₹10.14 crore already slipping into delinquency exceeding 90 days.
- Shaik Arshad Mohammod managed 767 loan accounts with a total outstanding amount of ₹491.38 crore, including ₹59.94 crore classified as 90-plus days past due (DPD).
- Basam Nikhilesh Reddy allegedly accepted ₹25.63 lakh in illegal monetary benefits from relationship managers and DSAs in exchange for approving loans.
- E Sai Shravan Kumar reportedly accepted illegal commissions from DSAs and shared proceeds with Nikhilesh Reddy to secure loan approvals.
- Ajay Newatia, as the senior regional head, is accused of acting as the principal enabler and conspirator by permitting, directing, and normalizing inflated valuations, deficit underwriting, and suppression of group exposure norms.
Ongoing Financial Impact and Investigation
The complainant further alleged: "Overall, the bank has identified about ₹70 crore in confirmed DPD exposure attributable to the loan accounts handled by the accused, with additional exposure temporarily masked through artificial EMI funding by the accused. The exact quantum of loss is continuing to increase and is subject to forensic auditing and investigation."
Police have booked the five accused under multiple sections of the Bharatiya Nyaya Sanhita, including Section 316(5) for criminal breach of trust, Section 318(4) for cheating, Section 336(3) for forgery for cheating, and Section 340(2) for using forged documents as genuine, all read with Section 61(2) for criminal conspiracy. The case was officially registered on February 28.
A CCS investigator provided an update on the ongoing probe: "We are verifying the evidence furnished by the bank and conducting an inquiry. Appropriate legal action would be initiated based on the findings. No arrests have been made yet."
The case highlights significant vulnerabilities in banking oversight and internal controls, raising questions about risk management practices in financial institutions. As the investigation progresses, authorities are expected to uncover further details about the alleged conspiracy and its full financial impact on Unity Small Finance Bank.
