An Indian court has sentenced a bank officer along with two business people for their part in a letter of credit (L/C) fraud.

The fraud caused losses to the Union National Bank of more than 100 million rupees. (Rs100 million)

Bank officer

A Chennai court has convicted a former assistant manager of a Chennai branch of Union Bank of India, Shri S.P.Damodaran.

He has been sentenced to two years rigorous imprisonment with a fine of Rs40,000.

Businessmen

The court also convicted the proprietor of the Madras Leather Company, Shri Mushtaq Ahmed and the proprietor of Nayeem Leather Overseas, Chennai, Shri K. Abdul Nayeem.

Both men have been sentenced to three years rigorous imprisonment with a fine of Rs200,000 each.

L/C fraud

The court heard that Damodaran, Ahmed and Nayeem forged a Rs108.6 million L/C purported to have been issued by the Union Bank of India's Nungambakkam branch.

The L/C was prepared with a forged signature of the branch official and presented at the bank's Thambu Chetty Street Branch.

The L/C was then discounted for Rs.105.2 million after deducting bank charges without any transaction actually taking place.

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