If you walk past Gandhi Chowk in Raichur, Karnataka, you wouldn’t guess that behind the dusty blue shutter of the Bank of Maharashtra branch, a quiet storm had been brewing for months.
Locals remember the man in charge, Narendra Reddy, as polite, punctual, and soft-spoken.
“He would greet everyone with a smile,” said a local customer, sipping his tea outside a nearby stall. “Who knew what was happening inside?”
But what was happening inside the bank wasn’t business as usual. It was a well-wrapped illusion, a scam that would eventually cost the bank ₹10.9 crore.
“Sir, where is my gold?”
The first signs came when a customer walked in, visibly agitated, let’s call her Meenakshi.
“Sir, I paid the interest regularly. I gave my gold. Why is there a problem with the account now?”
Narendra, calm as ever, shuffled a few papers and gave her a practiced nod. “System issue, ma’am. You’ll get a message in a few hours. Don’t worry.”
But that message never came.
It was just one of over 100 such accounts. Customers had unknowingly become part of a complex web of ghost loans and fake deposit accounts opened in their names, but never really for them.
How Did the Scam Work?
Let’s break it down, because this isn’t your usual headline-grabbing bank robbery. It’s smarter, sneakier, and a whole lot scarier.
Reddy didn’t need to steal cash from the vault or smuggle gold out in a bag. He simply created gold loans on paper.
Imagine this: You’re a regular customer at the bank. You’ve never taken a gold loan. One fine day, an internal audit finds that there’s a ₹3 lakh gold loan issued in your name.
But you never signed a form, never pledged your jewellery. You weren’t even in town when it supposedly happened.
That’s exactly what Reddy did. Over 100 times.
He created fake gold loan entries using real customer names. Since he had access to all records, he could pick any dormant or less-active account and issue loans without the customer ever knowing.
The money from these fake loans? That went into accounts opened in the names of his relatives, colleagues, or even the customers themselves, without their knowledge.
In some instances, the gold was genuinely deposited by a customer, but the paperwork was manipulated.
So even if they paid interest and assumed everything was normal, their gold may not have been properly recorded—or worse, used elsewhere.
₹88 lakh was traced to a former colleague. Some of the money was also laundered through 105 bank accounts.
The bank, for a long time, didn’t notice. After all, on the surface, the ledgers looked just fine. It took a deep audit to expose the rot.
A Bank Manager with Too Much Access, and Too Little Oversight
The scam ran from October 2022 to March 2025. Over three years, Reddy had allegedly manipulated internal systems, bypassed documentation protocols, and executed gold loan disbursals without actually receiving any gold from many customers.
In many cases, genuine customers had pledged gold, but their valuables were either misused, replaced, or not documented properly.
What really rattled the auditors was the pattern. About ₹88 lakh was traced to a former colleague’s account in Kurnool, Andhra Pradesh.
Some money was funneled into accounts in the names of relatives. In all, 105 fake accounts were linked to this operation.
No major vault heist. No masked robbers. Just a man in a chair, in a position of trust, quietly orchestrating fraud one fake account at a time.
“He Left Like Any Other Day…”
When the audit began, whispers floated around.
“Did you hear what happened?”
“Internal audit. Something’s fishy.”
By the time the seriousness of the situation became clear, Reddy had disappeared.
“He left like it was just another Tuesday,” a fellow bank employee shared anonymously. “We didn’t know it was goodbye.”
A formal complaint was lodged. Raichur police began their hunt.
But Reddy was long gone, possibly tipped off, possibly prepared.
Not Just a One-Off Scam
What makes this story more disturbing is that it isn’t an outlier.
In Kozhikode, Kerala, another manager was caught replacing pledged gold with fake pieces, costing the bank ₹17 crore.
In Vadodara, Gujarat, a man impersonated a bank manager and issued fraudulent gold loans, duping people and the bank alike.
This pattern is growing. Real gold, fake loans. Or fake gold, real loans. Either way, it’s the honest customer who ends up losing.
What Can Customers Learn From This?
Let’s be real, no one walks into a bank expecting to be conned. Especially not by someone who greets you with folded hands and remembers your kids’ names.
But it’s a wake-up call.
If you’re pledging gold, get documentation. Get loan disbursal receipts. Make sure SMS and email alerts are working.
And ask questions, even if they feel uncomfortable. A little suspicion today can save a lot of heartbreak tomorrow.
And for banks? It’s time they stop assuming that fraud always comes from the outside.
Final Thoughts
Scams like these don’t just shake balance sheets—they shake trust. The kind of trust that takes years to build, and seconds to lose.
Narendra Reddy may still be absconding, but his story has become yet another entry in India’s growing list of internal banking frauds, where power, if unchecked, becomes a license for manipulation.
Let’s hope his arrest becomes a reminder, not just a headline.
