Authorities in Maharashtra, India, have arrested seven individuals, including a factory owner, in connection with a fraud involving the use of counterfeit jewellery to secure bank loans totaling approximately 250 million rupees (around RM10.5 million). The case emerged during a routine audit conducted by a private bank after discrepancies were identified in one borrower's account.

The audit focused on gold jewellery pledged as loan collateral across nine branches of the bank in the Nagpur district. Bank officials became suspicious about the weight and purity of the jewellery, leading them to expand their review to 152 accounts where gold had been provided as security. The investigation uncovered that 38 loans had been approved using fake jewellery as collateral.

Following these findings, the bank filed a police complaint, prompting a broader inquiry. Authorities discovered that the owner of a metal recycling factory had allegedly submitted fraudulent loan applications by using the identity documents of friends, relatives, and former employees without their knowledge or consent.

The seven individuals arrested are currently assisting police in the ongoing investigation, as officials work to determine the full extent of the scheme and identify any additional parties involved. The case highlights concerns over loan verification processes and the use of fake collateral in financial transactions.