StanChart probes Rs 80 cr HNI fund diversion

New Delhi | Bengaluru: Standard Chartered Bank widened a fraud probe at its priority banking unit after a complaint surfaced in mid-November about funds disappearing from a customer’s account at a branch in Bengaluru, according to people with knowledge of the matter.The inquiry is looking at possible diversion of funds worth at least Rs 80 crore belonging to a set of high net worth individuals (HNI) who have accounts at the bank’s MG Road branch in the city, they said.The case had begun last month with a customer complaining about the diversion of Rs 2.7 crore. The Karnataka government has ordered the transfer of the case from the Bengaluru City Police to the state Criminal Investigation Department (CID). 126064306 ‘Customers Top Priority’ The transfer has been ordered since the amount involved in the alleged diversion exceeds Rs 5 crore, senior officials said.Standard Chartered Bank confirmed it’s investigating the matter. “The interests of our customers are top priority for us,” Standard Chartered Bank said in its response to ET’s queries. “In this instance, the bank identified some irregularities being committed by one employee in the Bengaluru branch. As the bank has a zero-tolerance policy for any misconduct, a police complaint was filed immediately, and the concerned person has since been arrested by the police and terminated from service by the bank.The bank has proactively reached out to the impacted clients and initiated an internal investigation.” PwC has been engaged to undertake an investigation after a preliminary internal enquiry over a fortnight ago revealed several anomalies, as per the sources. A customer had reported last month that Rs 2.7 crore placed in fixed deposits had disappeared.An enquiry found that the volume of customers’ funds that were misused was much higher, said the people cited. “Some very high-profile customers are aggrieved,” said one of the persons. “They belong to wealthy business families.” The bank pledged to make good any losses suffered by customers. “Currently the police and our internal investigations are underway, and the bank continues to extend all support and cooperation to the relevant authorities,” StanChart told ET. “The bank is dedicated to safeguarding its customers’ interest including refund of any misappropriated funds to impacted clients.”