Bank of Baroda Gold-Loan Fraud: Branch Manager, Two Others Held in Eluru District

Jangareddygudem (Eluru district), Sept. 9: The gold-loan fraud that shook this small Andhra Pradesh town has moved one step closer to the bank's own offices, with police arresting three Bank of Baroda officials on Wednesday for their alleged role in the racket.

The arrested men are Kumarapu Bhaskar Rao, the then branch manager, T. Ajay Babu, joint manager, and J. Sairaj, credit officer.
Eluru district Superintendent of Police K. Pratap Shiva Kishore confirmed the arrests to the media.

The trio was picked up after investigators established their involvement in the scam that first surfaced in June this year.

Police had earlier arrested the bank's gold appraiser, Chalapaka Raju, who they describe as the kingpin of the operation.

From Raju's possession, investigators recovered 4.120 kg of gold ornaments and ₹10 lakh in cash, said Deputy SP B.H. Venkateswarlu.

According to the DSP, Raju colluded with the bank insiders to pull off a substitution trick of remarkable simplicity.

Original ornaments pledged by customers were quietly removed from the branch's lockers.

In their place, the accused slipped in fake jewellery and base-metal lookalikes weighted to pass routine checks.

The fraud came to light only after a senior branch manager lodged a formal complaint, prompting a case at Jangareddygudem police station.

Registered as Crime No. 198/2026, the case was booked under multiple sections of the Bharatiya Nyaya Sanhita, including those covering cheating and criminal breach of trust.

A special investigation team, supervised by ASP and SDPO Sushmitha R., then conducted a forensic audit of the branch's vault.

The audit uncovered serious irregularities across 176 gold loan accounts, police said.
Investigators estimate that roughly 6.4 kg of pledged gold was siphoned off, with a market value of around ₹10 crore.

The stolen ornaments were sold or re-pledged at several jewellery shops in Jangareddygudem, often in the names of Raju's parents, police found.

So far, 4.120 kg of gold worth about ₹5.71 crore has been traced and recovered from these shops, along with ₹10 lakh in cash.

Police say efforts continue to recover the remaining gold, estimated at over two kilograms.

Wednesday's arrests signal that investigators now believe the scam could not have run without complicity from within the branch.

The SP said officers are verifying bank records, accounts and the passbooks issued to customers.

The role of others, if any, is also under examination, he added.
For dozens of local families — many of them farmers and small borrowers — the episode has been personally devastating.

Their wedding jewellery and life savings were pledged as collateral, only to vanish from the bank's custody.

The bank has previously assured customers that legitimate depositors will be protected, with compensation to follow RBI guidelines.

Critics say the case exposes how easily a single appraiser, armed with insider cooperation, can defeat a bank's layered checks.

Daily vault verification, periodic audits and supervisory sign-offs all appear to have been bypassed or compromised.

The arrested officials were produced before a court and remanded, police said, as interrogation of the appraiser continues in custody.

With three managers now behind bars alongside the appraiser, investigators are expected to widen the net to anyone who received or laundered the stolen gold.

For the town's shaken depositors, the message from police is simple: the recovery of their gold is now a matter of law — and of time.