The arrested persons involved in the loan fraud case. Telegraph picture

Bhubaneswar, Dec. 29: Officials of the state crime branch’s economic offence wing today arrested four persons in connection with a loan fraud to the tune of Rs 2.96 crore.

The accused also included the former branch manager and field officer of the Odisha Gramya Bank (Bilahat branch) in Jagatsinghpur,

The accused had withdrawn money in form of loans by creating 148 fake beneficiaries under the KGB Personal Loan Scheme during 2011-12.

The loans were sanctioned on the basis of forged documents and by showing the beneficiaries as teachers of various upper primary schools, middle English schools and high schools.

Police said the loans were availed by producing false salary certificates, copies of acquaintance rolls and undertaking forms.

“While field officer Harmohan Pattanaik, 57, had approved the loans without verification of documents, former branch manager Prakash Chandra Baral sanctioned the roll. We have also arrested the mastermind, Hemanta Swain, 37, who is also a school teacher,” said deputy inspector general of the wing Rajesh Kumar.

The police have also arrested Gyana Ranjan Mohanty, 42, who had helped Hemanta in preparing the forged documents.

Hemanta and other three accused had invested around Rs 2 crore in a money deposit and collection company. The police said the company was giving 15 per cent interest on the deposits.

The accused used to pay monthly interests to the bank from the monthly returns provided by the company. But, the company collapsed in August following the arrest of its top official. Consequently, Hemanta and other three accused failed to deposit the loan interest.

Later, the general manager (vigilance) of the Odisha Gramya Bank filed a case with the economic offence wing on the basis of an inquiry.

The wing has registered a case under sections 420 (cheating), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 120B (punishment of criminal conspiracy), 471 (using as genuine a forged document) and 409 (criminal breach of trust by public servant) of the Indian Penal Code.

In February, the investigating agency arrested six persons in connection with a bank fraud worth Rs 2 crore from Gandarpur branch of Allahabad Bank in Cuttack under the “Sarala Loan Scheme”.

The arrested persons included branch manger Akhila Ranjan Das. The accused had drawn the money by creating as many as 85 fake beneficiaries.