ED conducted Search Operations at 6 Locations in connection with Loan Fraud under Kisan Credit Card

The Directorate of Enforcement (ED) conducted search operations at six locations in Andhra Pradesh and Telangana on 29.11.2023 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in connection with an investigation regarding fraud in sanction of loans under Kisan Credit Card (KCC) to farmers for construction of fish tanks.

ED initiated an investigation based on FIR registered by CBI, ACB, Visakhapatnam under various sections of the Indian Penal Code, 1860 and Prevention of Corruption Act, 1988 alleging large-scale fraud at IDBI Bank, Rajahmundry Branch, East Godavari District, Andhra Pradesh in connection with processing and approving of short term loans /KCC to farmers of fish farming/pisciculture for the construction of ponds/tanks.

The ED investigation found that the accused people obtained KYC papers, blank cheques, and other financial instruments from employees, known persons, farmers, and others under the guise of salary payment through banking channels, medical reimbursement, provident fund, and so on.

On the basis of these documents, they took loans in their names to the tune of Rs. 311.05 Crore with the connivance of bank officials and valuers.

Loan amounts credited to the accounts of employees, farmers, and others were moved to the accounts of the accused, and in many cases, the full loan amount was withdrawn in cash. Thus, the defendants operated as loan aggregators and eventually utilized the loan funds for personal advantage, including investment in their enterprises and property acquisition in the names of family members and others.

The searches were conducted at the residences and office premises of loan aggregators which resulted in the recovery and seizure of digital devices and incriminating documents revealing numerous immovable/ movable properties acquired from the proceeds of crime.

Further investigation is under progress.