ED conducts raids in AP, Telangana in connection with Rs 311.05-Cr Kisan Credit Card scam

HYDERABAD: The Directorate of Enforcement (ED) conducted search operations at six locations in Andhra Pradesh and Telangana on November 29, 2023, under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in connection with an investigation regarding fraud in the sanction of loans under Kisan Credit Card (KCC) to farmers for construction of fish tanks.

The ED initiated an investigation based on an FIR registered by CBI and 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 sanctioning of short-term loans (KCC) to farmers of fish farming for the construction of ponds and tanks.

The ED investigation revealed that the accused persons took KYC documents and blank cheques from their employees, known persons, and farmers, on the pretext of salary payment through banking channels, medical reimbursement, and provident funds.

Based on these documents, they took loans in their names to the tune of Rs. 311.05 crore with the connivance of bank officials and valuers. The loan amounts were credited into the accounts of workers and were transferred to the accused persons’ accounts and in many cases, the entire loan amount was withdrawn in cash.

The accused persons thus acted as loan aggregators and ultimately used the loan amounts for their personal gains, including investment in their businesses and acquisition of properties in the names of family members and other persons.

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 and movable properties acquired from the proceeds of crime. Further investigation is in progress.