The economic offences wing (EOW) of the state crime branch in Bhubaneswar arrested two officials of a public sector bank on Wednesday for allegedly misappropriating Rs 5.21 crore through fraudulent gold loan disbursals using fake ornaments as collateral.
Accused identified
The accused have been identified as Chandan Kumar Mahala (45) and Debendra Niranjan Sahu (55). Their arrest follows the earlier apprehension of the bank’s gold appraiser, Prashanta Kumar Mallick (40), on April 22.
Details of the fraud
According to the complaint lodged by the bank on February 10 this year, Mallick allegedly colluded with some other staff members and manipulated gold loan accounts between October 2024 and July 2025 at the Balichandrapur branch in Jajpur district. The total fraud amount is estimated at Rs 5,21,42,000.
An EOW official stated, “Our investigation has established clear links between Mahala and Sahu in the scam. They colluded with Mallick and sanctioned 105 gold loans without proper documentation.”
Nature of the loans
Of the 105 accounts, 31 were backed by fake gold ornaments, while 74 were sanctioned without any collateral. The bank’s internal audit later uncovered missing loan documents, forged borrower signatures, and absent goldsmith valuation reports.
At the time of the fraud, Mahala was posted as chief manager and Sahu as senior associate-cum-cash-in-charge at the branch.
Abuse of positions
“Mahala and Sahu abused their positions by approving loans without verifying the mortgaged ornaments. They ignored the bank’s empanelled gold valuers and bypassed mandatory checks on purity, eligibility, and documentation,” the EOW official added.
The gross weight of gold pledged for the 105 loans was 10,646.58 grams, which was later found to be fake.
Discovery of the fraud
The fraud came to light on July 14, 2025, during a routine inspection. “When questioned, gold appraiser Mallick failed to produce loan files and absconded. This triggered an immediate audit and internal investigation,” the EOW officer said, noting that the arrests were based on evidence provided by the bank.
