SyndicateBank

Head Office: Manipal - 576 119 (Karnataka)

Organisation & Methods Division
Circular No.166-2002-BC-FIC Date: 18-09-2002

PERMANENT UTILITY

FRAUDS PERPETRATED IN THE CREATION OF UREM OF PROPERTIES

DFFERED AS SECURITY TO THE CREDIT FACILITIES SANCTIONED.
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In spite of the availability of clear cut and detailed guidelines in the MOI and various circulars
issued from time to time on the captioned subject, several frauds have been unearthed recently
exposing our Bank to the avoidable huge financial loss due to the failure on the part of officials
to identify :-

i) the genuineness of the land records/title to the property (to confirm that the property to be
mortgaged really belongs to the mortgagor).

ii) the exact location and correct identity of the property to be mortgaged(to confirm where it is
located , whether it belongs to the mortgager and whether it exists at all).

iii) the mortgagor (to confirm that the real owner executes the UREM).

In fact the lapse/negligence becomes all the more serious/glaring when the mortgaged land is
found to have been sold/acquired several years prior to the creation of UREM, in couple of cases
and in one case (where the UREM is created by an impersonator), the real owner of the
mortgaged property had expired about 10-15 years ago. In yet another case, a completed flat
(ready for occupation) was shown as the flat allotted to the borrower ( a NRI party) and
mortgaged to the Bank which subsequently turned out that no flat in fact was allotted to the party
and the promoter(who was authorised by the NRI party to deal with the Bank) had intentionally
misled the Bank officials to temporarily misappropriate the loan proceeds.

The above events leading to the perpetration of the frauds are clear evidences to the fact that our
officials have not diligently applied their minds to the systems and procedures prescribed by the
Bank with regard to creation of UREM of landed property.

With the increase in the number of such frauds, officials in the Branch need to be more vigilant
and wary of such deceitful intentions/attempts by the unscrupulous elements. All that needs to be
done to thwart any such attempt is scrupulous adherence to the extant procedures of verification,
search, inspection etc. dealt in comprehensive detail in:
2 Circular No.166-2002-BC-FIC/18-09-2002

a) Para 9.15.0 of the MOI (Vol.II), 2001 edition, on Advances against mortgage of immovable
property( ML/ODM)

b) Circular No.106/99/BC dt.18.6.1999 on creation of mortgage in absence of original

documents and property offered by third party.

c) Circular No.155/2000/BC dt.16.8.2000 on frauds by deposit of fake title deeds of property.

d) Circular No. 66/2002/ BC dated 08.04.2002 on valuation, inspection, ownership, possession,

marketability etc. of securities offered.

Sudden spurt in frauds of this nature has brought to fore the urgent need for all branches having
UREM loans to conduct a serious one-time check/verification of all existing equitable mortgages
and confirm correctness thereof instead of learning about the fraud at the fag end of the process
of enforcing the UREM security for recovery of the dues.

Further, branches are hereby put on caution that any laxity/lapses observed in future will be
viewed very seriously. Branch Managers may discuss the contents of this circular in detail with
the branch staff in the periodical staff meeting held by them.

Clarifications if any required about this circular may be sought from FRAUD
INVESTIGATION CELL at Head Office, Manipal.

S.V.RAGHAVENDRAN
KUYNZ:YRSRE:YRULD GENERAL MANAGER
Check Word (Fraud Investigation Cell)