First the good news – you do not have to worry about it unless you keep more than Rs. 5-10 crores in bank fixed deposits.

If you do not, just stop reading. However if you are an accountant of a Trust or of a company which deals in such size of Fixed Deposits, you MUST read.

A fixer (called an agent) approaches you and says ‘You have Rs. 10 crores in fixed deposits why don’t you keep it through me, I can get you a good deal’.

So you say ‘I keep only in Nationalised Bank’ and the agent says ‘Sure, I am also talking of a Nationalised bank. Now it gets interesting.

Agent: Sir I know you have Rs. 5 crores in xyz public sector bank Ghatkopar branch, I just want you to shift it to Taloja branch of xyzz public sector bank.

So far so good. No way can you understand what goes wrong. So you say fine.

You are then asked to shift the deposit to Taloja. Obviously YOU are too lazy to travel all the way to T. So you give your cheque favoring “xyzz public sector bank’ and make a fixed deposit.

NOW STARTS THE FRAUD. The agent gives you some cash – say 2% (as agreed upon), you are happy with the YIELD. The agent FORGES or the ‘borrowing’ client makes an application for extra over draft AGAINST your Fixed deposit. The agent signs the FD (forgery) and gives it to the bank.

In the meanwhile he has made nice COLOUR ZEROX copies of the fixed deposit and given it to you. YOU HAVE NO CLUE THAT IT IS NOT THE ORIGINAL. Or he says ‘Let the FDR be with me, it will be useful for renewal’.

So here, your money is gone – however the application, the endorsing the FD, etc. are all FORGERY. So the chances are that you will get back your money from the bank.

Who are all involved?

Obviously the agent and the bank manager. It is the bank manager of Taloja who tells the agent about the FD. No way how the agent can know about it.

The Ghatkopar branch manager has no clue. The agent approaches a client and says “I can get you a limit of Rs. 10 crores from xyzz bank Taloja (again suggested by the branch manager to the agent) – but it will cost u about 4% cash. This client who is unable to get any credit from anywhere is happy AND NORMALLY MAY have no clue about what is happening at the back end.

Then the agent takes the cheque goes to Taloja branch makes the FD. Takes a color photocopy and gives it to the depositor and the original is kept in the bank…for a loan.

If you have any questions ask for it in the comments section. Subramoney.com is going to become a ‘Fraud highlighter’ – I hope more fraudsters read it and create new frauds. Saying this because almost all frauds have their origin in greed. That Gentleman, cannot be cured by Subramoney.

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  1. It actually did happen in Dehradun. South Indian Bank manager hatched a conspiracy and cheated another cooperative Bank of about 34 crores to benefit certain people in 2009-10. Soon the property is going to be attached by GoI.

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