‘Your Gold Is Gone!’ - Shocking gold loan scam rocks central bank, customers left stunned

Alleged multi-crore fraud at Chikkamagaluru branch of Central Bank of India surfaces after customers claim their pledged gold was replaced, loans misused, and fixed deposits siphoned off.

A shocking banking fraud has come to light involving the Chikkamagaluru branch of Central Bank of India, where customers allege that bank staff replaced their original gold ornaments with fake jewellery, misused loan amounts, and siphoned off fixed deposit funds over several years.

The alleged scam, which reportedly took place between 2020 and 2025, has triggered outrage among customers, forcing them to storm the Bengaluru regional office of the bank demanding immediate return of their pledged gold.

According to complaints, customers had deposited substantial quantities of gold, ranging from 80 grams to 142 grams and even 100 grams, to secure gold loans. Despite clearing their loan dues, many claim their gold was never returned. When questioned, they discovered that their original ornaments had allegedly been sold and replaced with fake gold.

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The complaint names branch manager Sandeep, staff member Narayanaswamy, and three others as the main accused. Customers have lodged a formal police complaint at Chikkamagaluru police station, accusing them of cheating, criminal breach of trust, and financial fraud.

Allegations reveal that bank staff secretly sanctioned additional gold loans in customers’ names without their knowledge and diverted the funds. Fixed deposit amounts were also allegedly transferred illegally. In some cases, loans were reportedly taken even in the names of deceased customers.

Further, customers allege that their documents were misused to secure gold loans from other banks, while their pledged gold was repeatedly re-used for obtaining fresh loans for personal benefit. There are also claims of illegal money transfers involving lakhs of rupees.

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In a dramatic twist, former clerk Narayanaswamy admitted that original gold ornaments were allegedly pledged in other banks to secure higher loans, and the proceeds were misappropriated. He claimed the money was used for personal purposes by those involved.

Angered by the prolonged delay and alleged deception lasting nearly four years, customers marched to the Bengaluru head office, demanding, “Return our gold.” They accused the bank of shielding those responsible and delaying justice.