₹12.5 Crore Cyber Fraud Exposes Lapses in Banking and Fintech Security: Axis Bank Manager Among Accused

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Cyber Fraud

Key Points

  1. Massive Fraud Uncovered: ₹12.5 crore siphoned from credit card payment platform CRED using fake documents and unauthorized account changes.
  2. Key Accused: Vaibhav Pitadia, Axis Bank Relationship Manager, masterminded the fraud with accomplices.
  3. Modus Operandi: Dormant corporate accounts reactivated using forged documents; 37 unauthorized transactions executed over two weeks.
  4. Axis Bank’s Lapses: Bank changed critical credentials based on fake documents, enabling the fraud.
  5. Accomplices Identified: A woman posing as CRED’s Managing Director and two others opened mule accounts to transfer stolen funds.
  6. Fraud Detection: Discrepancies discovered during CRED’s routine reconciliation; transactions flagged between October 29 and November 11.

Bangalore : In a shocking revelation, the Bangalore Police have arrested four individuals, including an Axis Bank Relationship Manager, in connection with a sophisticated ₹12.5 crore cyber fraud targeting the credit card payment platform CRED. The case has highlighted glaring vulnerabilities in banking and fintech security systems.

The Fraud Unfolds

The fraud, masterminded by Vaibhav Pitadia, a Relationship Manager at Axis Bank’s Ankleshwar branch in Gujarat, exploited dormant corporate accounts linked to CRED’s nodal account. Investigators revealed that Pitadia used forged documents to orchestrate the fraud, enlisting the help of three accomplices, including a woman who posed as the Managing Director (MD) of CRED.

Between October 29 and November 11, a total of 37 unauthorized transactions were executed, siphoning ₹12.5 crore into mule accounts controlled by the accused. The fraud came to light during a routine reconciliation by CRED on November 13, when discrepancies were flagged.

Execution of the Fraud

  • Targeting Dormant Accounts: Pitadia identified two dormant corporate accounts registered under Dream Plugpay Tech Solutions Pvt Ltd, linked to CRED.
  • Fake Documents: The accused submitted forged Corporate Internet Banking (CIB) forms, board resolutions, and other credentials to Axis Bank, reactivating the accounts with updated contact details.
  • Posing as CRED MD: Neha Ben, an Instagram acquaintance of Pitadia, posed as CRED’s MD to request account changes.
  • Money Transfers: Using the new credentials, unauthorized transactions transferred funds into mule accounts created with forged documents.

Accomplices and Their Roles

  • Neha Ben: Posed as CRED’s MD and submitted forged documents to Axis Bank.
  • Shailesh and Shubham: Opened mule accounts and facilitated money laundering using fake documents.

Axis Bank Under Scrutiny

The fraud has placed Axis Bank under the scanner for enabling unauthorized changes to critical account credentials based on fake documents. Experts have raised questions about the bank’s internal checks and verification processes.

Discovery and Action

The fraud surfaced during a routine reconciliation by CRED, which revealed discrepancies amounting to ₹12.5 crore. The fintech company immediately alerted Axis Bank, prompting an internal investigation and the involvement of law enforcement agencies.

Current Status

All four accused, including Pitadia, Neha, Shailesh, and Shubham, have been arrested. The police are continuing their investigation to trace the stolen funds and uncover potential lapses in banking and security protocols.

Implications for Fintech and Banking

This case underscores the critical need for stringent security measures in banking and fintech sectors. It highlights how internal vulnerabilities and lapses in document verification can be exploited to carry out large-scale frauds.

The ₹12.5 crore CRED fraud serves as a wake-up call for financial institutions to strengthen their safeguards against cyber and financial crimes. While the arrests mark a significant step toward justice, systemic reforms are essential to prevent such incidents in the future.

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