Standard Chartered Expands Fraud Probe Following ₹80 Crore HNI Fund Diversion in Bengaluru

As per The Economic Times report, Standard Chartered Bank has widened an internal and police-led investigation into suspected fund diversion at its priority banking unit in Bengaluru, following a customer complaint that surfaced in mid-November. 

Scope Of Alleged Fund Diversion 

The probe is examining the possible diversion of at least ₹80 crore belonging to several high net worth individuals holding accounts at the bank’s MG Road branch. The case initially emerged after a customer reported the disappearance of ₹2.7 crore placed in fixed deposits. 

Given that the alleged amount exceeded ₹5 crore, the Karnataka government ordered the transfer of the investigation from the Bengaluru City Police to the state Criminal Investigation Department, senior officials said. 

Standard Chartered confirmed the matter is under investigation. “The interests of our customers are top priority for us,” the bank said in response to 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.” 

Internal Review and Customer Impact 

As per news report, a preliminary internal review conducted about two weeks ago revealed multiple anomalies, prompting the bank to appoint PwC to carry out a detailed forensic investigation.  

An expanded enquiry suggested that the total value of customer funds misused was significantly higher than initially reported. 

Read More: Apraava Energy Secures $92 Million from BII and Standard Chartered to Install Smart Meters! 

Conclusion 

The case has raised concerns around internal controls in private banking operations, with investigations continuing on both regulatory and criminal fronts. 

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