A court in Chennai has convicted Kotak Mahindra Bank for criminal breach of trust and falsification of accounts and has imposed a fine of Rs 20 lakh for collecting an excess amount of Rs 14.3 lakh from a customer.
The court had last month held the bank guilty of perjury in the same case and fined Rs 1.5 lakh. The court also awarded a three-month imprisonment to S Karthikeyan, the bank's legal head, for the error.
The customer, R Selvaraj Primson, moved the court in 2012 when the bank refused to furnish him the break-up details or the Statement of Account for the settlement amount of Rs 1.70 crores paid in 2007.
The bank claimed in its counter affidavit that "no excess amount was collected". It was then that the court found that an excess of Rs 14,30,509 was collected from him.
The bank then silently transferred the collected excess amount to Mr Primson's other bank account without any intimation.
A case of perjury was then filed, and the bank was convicted of perjury.
It was on this basis, a criminal case was filed, and the Central Crime Branch of the Chennai Police unravelled a racket that pocketed large sums of excess money from customers and internally approved for diverting them as profit for the bank.
The modus operandi
Kotak Mahindra Bank had maintained two sets of account statements. One was the "customer copy", which gave no break-up to the customers while foreclosing the loans.
The other one was "accounts copy" that was circulated within the bank, giving exact details of the actual amount due and excess amount collected.
Later, internally, the bank authorities would approve diverting the excess money collected to the bank's profit account.
The police have recovered such documents of hundreds of customers who were cheated.
Mr Primson has been awarded a compensation of Rs 10 lakh from the fine imposed on the bank.
When asked for his message to customers like him, he said, "When you foreclose a loan, kindly demand for the break-up for the settlement amount demanded. Check it and pay. Without such a statement you wouldn't know the excess money being collected".
