The Hindu Business Line : Banks grapple with home loan frauds

When Ms Radha, working as an assistant accountant in the Tamil Nadu Agricultural University and Mr Natarajan, Assistant Post Master in Coimbatore, sought a loan for buying their home, they must have seemed the perfect `safe bet' for banks. With both husband and wife working in respectable positions in government/quasi-government institutions, bankers were only too willing to oblige.

The problem is that many of them actually did!

The lending institutions did not suspect that they were part of a multiple funding racket. Each institution probably thought itself the `chosen one'. And they had no reason to suspect the borrowers' credentials. Not until they chanced upon an advertisement in a local daily announcing the sale of the said property for which the couple had taken the loan.

On the run

The couple had by then, tricked a number of banks and chit fund companies by producing fake documents and availing the support.

Some banks that got caught in this trap lodged a complaint in a local police station. But the tricksters have fled the place and gone into hiding. In a manner rendered popular by many detective novels, we are informed that the `police have launched a hunt'.

Now that the matter is out in the open, more banks (about seven of them at the last count) have started to produce similar documents, all of which appear `original'. Police sources contend that of the seven documents produced, only one is `original' and the rest photocopied. They allege a nexus between the bank officials and the borrower.

Hoodwinked

Bankers, however, say that the couple had hoodwinked the lenders by typing the contents in stamp papers to make the documents appear `original'.

When asked about the signature of the Sub-Registrar, a bank official said, "They probably used a rubber stamp. In any case, it would be impossible for us to verify the signature of every Government official."

They preferred to call such issue an `occupational hazard'. However, bankers are confident of nabbing the culprits in this case as the police have traced their son in Australia. "We have asked the Embassy/Consulate for his parent's address," bankers say.

Rare incident

This may be a rare incident. But bankers fear more such problems could surface soon. According to them, there is no known mechanism for verifying the genuineness of the documents or property deeds.

The use of `colour photocopier' makes identification difficult, according to bankers. Lawyers on various bank panels have refused to certify the genuineness of the document. Some banks say that in some regions, about 10 per cent of the amounts disbursed have gone bad. Meanwhile, they have identified specific builders and brokers behind such fraudulent deals and circulated an "informal blacklist" to other offices to prevent further damage.

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