A court in Visakhapatnam has delivered a significant verdict, convicting nine individuals in two separate fraud cases that resulted in a substantial loss of over Rs 2.3 crore to the State Bank of India (SBI). The convicted include former bank employees and borrowers involved in a conspiracy to secure loans through fraudulent means.
Former SBI Managers Sentenced in KCC Loan Scam
In the first and more substantial case, the First Additional Special Judge Court for CBI Cases in Visakhapatnam, presided over by Judge P Vijaya Durga, pronounced its judgment on Tuesday. The court sentenced Chaganti Chalapathi Rao, the then branch manager of SBI's Anaparthi branch in East Godavari, and Poduri Subba Rao, the then assistant manager, to five years of simple imprisonment.
The case revolved around a criminal conspiracy where the bank officials colluded with borrowers and a middleman. Their mala fide intention was to cheat the bank by fraudulently processing and sanctioning three Kisan Credit Card (KCC) loans for operating fish ponds. These loans were meant for projects in Likithapudi village of Narasapuram mandal in West Godavari district.
As a direct result of this conspiracy, the SBI suffered a wrongful loss amounting to a staggering Rs 176.61 lakh (approximately Rs 1.76 crore). Following the judgment, the convicted former bank officials were immediately sent to Central Prison in Visakhapatnam.
Borrowers and Conspirator Also Face Prison Time
The court did not spare the beneficiaries of the scam. The borrowers involved—Sathi Satyanarayana Reddy, Tetali Srinivasa Reddy, and Nallamilli Venkata Narayana Reddy—along with the conspirator Mallidi Venkata Narayana Reddy, all from Anaparthi village, were each sentenced to two years of simple imprisonment. The court also imposed a collective fine of Rs 1.1 lakh on all the accused in this case.
Second Fraud Case: Fake Documents for Cash Credit
In a parallel but separate case heard by the same court, three individuals were convicted for defrauding the same SBI branch. The convicted are Medapati Kanaka Durga Prasad Reddy (managing partner of Sri Lakshmi Prasanna Foods), his wife Medapati Venkata Jhansi Lakshmi, and their business partner Chirla Sri Lakshmi Devi.
The trio was found guilty of obtaining a cash credit loan of Rs 60 lakh in 2010-2011 by submitting false and fabricated documents for their firm, Sri Lakshmi Prasanna Foods, based in Anaparthi. This fraudulent activity caused a wrongful loss of Rs 60.64 lakh to the SBI. The court sentenced all three to two years of simple imprisonment and levied a total fine of Rs 45,000.
A Strong Message Against Financial Fraud
The convictions in these two cases, resulting in a combined loss of over Rs 230 lakh (Rs 2.3 crore) to the public sector bank, send a strong message about the consequences of financial fraud. The judgment underscores the judiciary's commitment to holding both corrupt bank officials and unscrupulous borrowers accountable. The CBI's investigation and the court's decisive action highlight the ongoing crackdown on white-collar crimes within the banking sector, aiming to protect public financial institutions from such predatory schemes.
