Ranchi, Aug. 22: The State Bank of India appears to have been hit by an unusual fraud by a group of enterprising but unscrupulous employees in Dhanbad.

Two officers, four clerks and a cashier have been placed under suspension and the case referred to the Central Bureau of Investigation. While the dimension of the fraud is still not clear, it is said to run into crores.

The fraud came to light when soiled currency notes worth Rs 17 crore, which had accumulated over the last five years, were sent by Dhanbad SBI to the Reserve Bank of India for “destruction”. The RBI, however, sent back the consignment because the wads of currency notes had been tied with adhesive tapes in place of the regulation polymer bands or paper bands.

A routine inspection of the consignment led to the discovery that every wad contained several pieces of plain paper or newspaper clippings, cut neatly to fit into the size of the currency notes. Further scrutiny revealed a criminal conspiracy as the worthless pieces of paper were found to have been recorded as valid currency running into several crores.

According to one insider account, the counting is still going on but bank officials have already detected plain paper that doubled as currency worth Rs 1.45 crore.

The bank has been receiving soiled notes from people and replacing them with valid and newer currency notes. The conspirators appear to have siphoned off the legal tender while passing off worthless pieces of paper as soiled currency.

In the normal course, the bundles would have been shredded mechanically by a machine at RBI. But detection of the uniform use of adhesive tapes prompted the RBI to return the consignment and which eventually led to detection of the fraud.

SBI officials maintained a studied silence and refused to comment on the fraud, though some of them confirmed it on condition of anonymity.

According to these sources, the neatly stacked pieces of paper, inserted in between the actual currency notes, were sent to the RBI in June. The consignment was returned the same month and an inquiry in the third week revealed the scam, forcing SBI to suspend the cashier, who was due to retire shortly.

This is the second scandal to have hit SBI in this region as investigators are yet to unravel the mysterious disappearance of Rs 1.21 crore from the Main Road branch of the bank about two years ago.

SBI assistant general manager, Dhanbad, G. Maheshwari, refused to answer any question on the plea that it was the bank’s internal matter.

The general secretary of the SBI employees’ union, J.N. Singh, however, said the union was silent on the suspension as the fraud involved a huge sum and was unusual in nature.

RBI deputy general manager (administration) A.K. Bhattacharya said RBI uses a sophisticated machine to verify, count and destroy currency notes. But since staples, pins or adhesive tapes can potentially damage the machine, the remittance was returned to SBI without entering it into the books of RBI.