Sri Vijaya Puram, July 01: In one of the largest financial frauds to rock the Andaman and Nicobar Islands, dozens of residents have listed themselves as borrowers of massive loans they never applied for. Investigators probing the Andaman and Nicobar State Cooperative Bank Ltd (ANSCB) have uncovered a sprawling scam now officially valued at over ₹300 crore, though that number may rise sharply as forensic audits continue.
The case, being handled by the Crime Investigation Department (CID), has so far led to the arrest of five senior bank officials. Among them are the bank’s Managing Director K. Murugan, Loan Sanction Manager Kalivaran, and three others closely involved in credit approvals and internal oversight. All five are in judicial custody. According to investigators, these officials colluded to issue loans in the names of unsuspecting individuals, many of whom are only now learning that crores of rupees were taken using forged documents and inflated land valuations.
In one instance, a ₹10 crore loan was sanctioned in the name of a bank driver based on a fabricated property transaction. In several others, plots worth ₹2 crore were deliberately overvalued at ₹10 crore, with the inflated figures used to justify massive disbursals. The funds were then funneled through shell firms and, in many cases, reportedly returned in cash, effectively turning the cooperative bank into a channel for laundering money. CID officials said more than ten fictitious companies were involved, each posing as legitimate borrowers with forged identities and paperwork. Internal documents appear to show that loan officers approved these transactions despite glaring inconsistencies.
Many of the shell firms were reportedly floated by individuals with no known prior business activity. CID sources told The Wave Andaman that several of the accused created multiple paper-only entities with common addresses and recycled land documents to generate fresh loan proposals. Appraisers within the bank signed off on questionable deals, and in some cases, the same property was mortgaged multiple times across different loan files.
Documents reviewed by investigators suggest that the misuse of the loan system was widespread and systematic. The bank’s internal audit mechanism, which is expected to flag unusual disbursal patterns and verify borrower credentials, appears to have been either bypassed or compromised. An internal compliance report submitted late last year, now part of the CID’s investigation, indicated unusual lending patterns and asset concentration in select accounts, but no disciplinary action followed at the time.
Earlier this month, The Wave Andaman had reported that the CID’s Special Investigation Team began seizing computers and server access from ANSCB’s headquarters and key branches, including Aberdeen and Junglighat, as part of a wider forensic sweep. Investigators believe that key digital trails were either tampered with or intentionally left incomplete to mask the true scale of disbursals. The Reserve Bank of India and the Registrar of Cooperative Societies have since been alerted.
The original First Information Report (FIR No. 14/2024), filed on May 15, named over 200 individuals, including bank employees, local businessmen, and loan beneficiaries. Authorities say the scam is rooted in systemic failures, including poor oversight by the bank’s previous board and manipulation of the cooperative lending structure for personal gain.
As the probe widens, the CID has begun freezing bank accounts, seizing digital records, and coordinating with forensic teams to recover assets. Investigators have assured the public that accountability will be enforced at every level, and efforts to trace and recover misappropriated funds are already in motion. Meanwhile, the revelations have shaken public confidence in cooperative banking institutions, particularly in rural areas where ANSCB plays a crucial financial role. Authorities have urged depositors and stakeholders to await official updates as more arrests and disclosures are expected in the days ahead.
