Bank Employee’s ₹65 Lakh Trading Fraud Exposes Customer Account Vulnerabilities

A bank employee in Ghaziabad has been arrested for a significant fraud. Somil Tiwari allegedly embezzled about ₹65 lakh from customer accounts. The Punjab and Sind Bank employee used the stolen money for stock market trading.

The fraud was uncovered in late November. It came to light after a customer’s cheque bounced unexpectedly. Branch Manager Himanshu Gupta filed a formal police complaint, launching the investigation.

How the Trading Scam Was Executed Inside the Bank

Police say Tiwari targeted inactive or low-activity customer accounts. He created fake accounts to facilitate the theft. Funds were then moved using fraudulent RTGS transfers and cheques.

According to Assistant Commissioner Amit Saxena, Tiwari incurred heavy losses in the market. He tried to cover these losses by stealing more money. This created a cycle of theft that ultimately led to the scheme’s collapse.

The accused has confessed to the crimes during interrogation. Police confirmed his arrest on Saturday. Further investigation is ongoing to trace all the misappropriated funds.

A Broader Pattern of Financial Fraud Emerges

This case is not isolated. It highlights persistent vulnerabilities within financial systems. Just last November, Delhi Police busted a similar forex trading scam with Dubai links.

In that case, a private bank’s sales manager was arrested. The syndicate used shell companies and “mule” accounts to launder money. Victims were lured via social media with promises of fake high returns from forex trading.

These incidents raise serious questions about internal banking controls. They show how trusted employees can exploit system weaknesses. Customers and regulators are now paying closer attention.

The arrest of the bank employee for embezzlement underscores critical gaps in financial oversight. It serves as a stark reminder for institutions to strengthen internal audits and monitoring protocols to prevent insider fraud.

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How did the bank employee carry out the fraud?

He targeted inactive customer accounts. Tiwari then created fictitious accounts and moved money using fraudulent RTGS transfers and cheques. The stolen funds were funneled into his personal stock trading activities.

How much money was embezzled in this case?

The police investigation points to approximately ₹65 lakh being misappropriated. This amount was taken from several customer accounts at the Punjab and Sind Bank branch. The exact total may be clarified as the probe continues.

Will the affected customers get their money back?

That process is likely to be complex and lengthy. Recovery depends on the outcome of the police investigation and any subsequent legal proceedings. Banks often have insurance for such frauds, but reimbursement is not always immediate.

What does this say about banking security?

It reveals a significant vulnerability to insider threats. The case suggests that internal controls over fund transfers and account monitoring may need strengthening. It prompts a review of audit processes for low-activity accounts.

Is this type of fraud common?

While large-scale insider fraud is not an everyday event, it is a recurring risk in the financial sector. Similar schemes, like the recent Delhi forex scam, show criminals continually adapt their methods to exploit system weaknesses.