Fake Gold Loan Scam Uncovered at Canara Bank Civil Lines Branch in Prayagraj; 16 Booked for Fraud, Criminal Breach of Trust
A major financial fraud involving fake gold pledged for loans has come to light at the Civil Lines branch of Canara Bank in Prayagraj, raising serious concerns over verification procedures in gold loan disbursement.
Acting on an internal review, the bank has filed a formal complaint against 16 individuals, including account holders and empanelled gold appraisers, after the pledged gold was found to be counterfeit.
According to the written complaint submitted by Regional Head and Assistant General Manager Pankaj Verma, the branch had sanctioned gold loans to 14 customers between 2023 and 2025.
The loans were approved based on valuation reports prepared by the bank’s panel gold appraiser, Vishnu Verma. Based on the appraisal, loans amounting to ₹61,95,000 were disbursed against the pledged jewellery.
As per banking norms, the loan accounts were later subjected to revaluation. During a fresh verification conducted on July 3 and July 15, 2025, by different certified gold valuers, a startling revelation emerged — the gold pledged as collateral was found to be fake.
The discovery has raised serious questions about the monitoring mechanism and due diligence followed in the gold loan approval process.
Following the complaint, police at the Civil Lines police station have registered a case and initiated an investigation.
Station House Officer Ramashray Yadav confirmed that evidence is being collected and appropriate legal action will be taken based on the findings. According to the bank, the total outstanding loan amount, including interest, has now reached ₹64,01,997.
The role of empanelled gold appraisers Vishnu Verma and Kaushal Kishore Verma has also come under suspicion. It has been alleged that either due to negligence or possible collusion, the appraisers incorrectly certified the fake gold as genuine, enabling the fraudulent loan disbursement.
The FIR names several accused borrowers, including Paltu, Mahesh Pratap Singh, Shreesh Kumar Srivastava, Ajay Kumar, Mohammad Arman, Vikas Kumar, Ravi Kumar, Manoj Kumar, Ranjana Yadav, Faiz Khan, Kuldeep Kumar Dubey, Alok Kesarwani, Kartikeya Kaushik and Mrityunjay Singh, all of whom had obtained gold loans from the branch.
The bank has described the matter as a serious case of financial irregularity involving the misuse of public funds.
According to the complaint, the alleged acts fall under offences related to cheating, criminal breach of trust, and criminal conspiracy under relevant provisions of Indian law.
The case has once again highlighted the need for stricter verification protocols and enhanced accountability in gold loan transactions to safeguard financial institutions from fraudulent practices.
