Standard Chartered Bank has expanded a fraud investigation at its priority banking unit after a complaint emerged in mid-November alleging that funds had gone missing from a customer’s account at its Bengaluru
branch, people familiar with the matter said.
The probe is examining the possible diversion of at least Rs 80 crore belonging to a group of high net worth individuals (HNIs) who hold accounts at the bank’s MG Road branch in the city, the people added.
The case originated last month when a customer complained that Rs 2.7 crore had been diverted from their account. Given that the alleged amount involved exceeds Rs 5 crore, the Karnataka government has ordered the transfer of the investigation from the Bengaluru City Police to the state Criminal Investigation Department (CID), senior officials said.
Customers’ interests a priority, says bank
Confirming the investigation, Standard Chartered Bank said safeguarding customers’ interests remains its top priority. According to The Economic Times, the bank said it had identified irregularities committed by a single employee at its Bengaluru branch.
“As the bank has a zero-tolerance policy for any misconduct, a police complaint was filed immediately. The concerned individual has since been arrested by the police and terminated from service by the bank,” Standard Chartered told ET.
The bank added that it has proactively reached out to affected clients and launched an internal investigation. Following a preliminary internal enquiry conducted over the past fortnight, several anomalies were identified, prompting the bank to engage PwC to carry out a detailed investigation, ET reported, quoting sources.
Initially, a customer had reported that Rs 2.7 crore invested in fixed deposits had disappeared. Subsequent enquiries revealed that the scale of misused customer funds was significantly higher, according to people aware of the findings. “Some very high-profile customers are aggrieved,” one of the people said, adding that they belong to wealthy business families.
Standard Chartered has assured customers that it will make good any losses suffered. “Currently, the police and our internal investigations are underway, and the bank continues to extend all support and cooperation to the relevant authorities,” the bank said. “The bank is dedicated to safeguarding its customers’ interests, including refunding any misappropriated funds to impacted clients.”
