The Central Crime Branch (CCB) of the Chennai City Police has busted a fake bank that had been operating in the city and eight other places in the State and arrested the prime accused in the case. The police took action following a complaint from the Reserve Bank of India (RBI), Chennai.

The prime accused, Chandrabose, 42, who had an MBA degree from the United Kingdom, reportedly ran the entity in the name of ‘Rural and Agricultural Farmers’ Co-operative (RAFC) Bank’ for nearly a year and collected unauthorised deposits from the public claiming to be an RBI-regulated entity.

A special team conducted a search at the bank’s head office in VGN Brent Park, Ambattur, and seized incriminating materials. Chandrabose was arrested and remanded in judicial custody till November 18. A luxury car was seized from him.

Addressing reporters here, City Police Commissioner Shankar Jiwal said, “Our investigation revealed that the accused had fabricated a certificate purportedly issued by the RBI and opened branches of the Rural and Agricultural Farmers’ Co-operative Bank in nine places. They collected deposits under various schemes and advanced loans. Our preliminary investigation revealed that the

entity might have transacted around ₹2 crore.” Like any other bank, the entity used passbooks, withdrawal slips, deposit slips, fixed deposits, KYC documents and rubber stamps. The branches were also functioning in Thirumangalam (Madurai), Salem, Erode, Namakkal, Kallakurichi, Perambalur, Vriddhachalam and Tiruvannamalai.

The accused had recruited staff for branches by collecting ₹2 lakh to ₹7 lakh. Through the staff, the accused enrolled 2,000 members across the State and collected ₹700 from each as membership fee.

Mr. Jiwal said the accused obtained prepaid cards of ICICI Bank in the name of the RAFC Society, issued the cards to its enrolled members and activated them by submitting the KYC documents of the members to the ICICI Bank.

“The amount collected from the public was deposited in an ICICI Bank account. It has been frozen with the available balance of ₹56 lakh. Further investigation is on to ascertain how many persons were affected and how many were involved in the fraud,” he said.

The prime accused had worked in a financial firm and using that experience, he planned to run the entity as a bank after registering it as a cooperative society.