Unity Small Finance Bank lodges police complaint against five ex-employees over loan fraud

Hyderabad: Unity Small Finance Bank Limited has lodged a complaint with Central Crime Station (CCS), Hyderabad, alleging a conspiracy by five former employees that inflicted multi-crore losses on the bank's secured lending portfolio between 2023 and 2025. CCS police have registered a case against the accused and launched a probe.Bank's authorised representative Ajay Kumar Punna alleged that former regional credit manager Basam Nikhilesh Reddy, former area business managers Kiran Lingam and Shaik Arshad Mohammod, former senior regional head Ajay Newatia and former relationship manager E Sai Shravan Kumar were involved in the fraud.
Police said an internal probe by Fraud Risk Management team of the bank uncovered "serious and systemic irregularities" in loan sourcing, appraisal, valuation and monitoring across south Hyderabad zone. "As per the complainant, the accused demanded illegal gratification for loan approvals from customers, direct selling agents (DSAs) for processing and sanctioning loans. They inflated collateral valuations, sanctioned unauthorised loans and channelled illicit proceeds through relatives and third parties," a CCS official said.According to the complaint, 271 accounts handled by Kiran Lingam totalled 94.16 crore, of which 10.14 crore already slipped into over 90 day delinquency. A further 767 loan accounts linked to Mohammod had a total outstanding amount of 491.38 crore, with 59.94 crore classified as 90 plus days past due (DPD). Nikhilesh Reddy allegedly accepted 25.63 lakh illegal monetary benefits from relationship managers and DSAs in exchange for approving loans. Sai Shravan accepted illegal commissions from DSAs and shared proceeds with Nikhilesh Reddy for loan approvals. Ajay Newatia, as the senior regional head, acted as principal enabler and conspirator by permitting, directing and normalising inflated valuations, deficit underwriting and suppression of group exposure norms."Overall, the bank has identified about 70 crore in confirmed DPD exposure attributable to the loan accounts handled by the accused, with additional exposure temporarily masked through artificial EMI funding by the accused. The exact quantum of loss is continuing to increase and is subject to forensic auditing and investigation," the complainant alleged.Police booked the five accused under Sections 316(5) (criminal breach of trust), 318(4) (cheating), 336(3) (forgery for cheating) and 340(2) (Using as genuine a forged document or electronic record) read with 61(2) (criminal conspiracy) of the Bharatiya Nyaya Sanhita on Feb 28. "We are verifying the evidence furnished by the bank and conducting an inquiry. Appropriate legal action would be initiated based on the findings. No arrests have been made yet," a CCS investigator said.