IDBI Bank manager convicted for fraudulent trading, causing

Mumbai: A sessions court on Wednesday convicted an IDBI Bank manager and sentenced him to one year’s imprisonment for carrying out Exchange Traded Currency Option (ETCO) transactions for his own benefit, causing a loss of ₹56.81 lakh to the bank.
The convict, Chandrahas Praveen Sampat, was appointed as a derivatives trading dealer in 2007, tasked with executing transactions on behalf of the bank within the ETCO segment. He established a Currency Option Account with M/s. Share Khan Ltd. on 26 May 2012, following authorisation from the bank. This account was subsequently linked to his savings account at IDBI Bank, Sion Branch, Mumbai.
On 16 January 2023, the investigation department of the National Stock Exchange Ltd. (NSE) notified IDBI Bank of anomalous trading activities involving the bank’s ETCOs, specifically transactions executed by the dealer with a single counterparty. Further examination revealed that the dealer in question was Chandrahas Sampat. It was discovered that Sampat had conducted and subsequently reversed trades with himself as the counterparty, resulting in a financial loss for the bank and personal gain for himself. These transactions were carried out using his personal account.
Following intervention by bank officials, Sampat confessed in writing to executing these trades between his personal account and the bank’s account. On 6 February 2023, Sampat reported to the bank that the estimated financial loss incurred amounted to ₹56,81,575.
Between 9 November 2012 and 18 January 2013, Sampat executed 36 contracts/trades over 23 trading days. Sampat exploited his official role as a dealer to engage in ETCO transactions where he was both the buyer and the seller. He manipulated these trades to secure personal gains by purchasing ETCO contracts from the bank at a lower premium through his personal account and subsequently selling them to the bank at a higher premium. Conversely, he also sold contracts from his personal account at a higher premium and repurchased them at a lower premium while operating in his capacity as a bank dealer.
An internal committee appointed by the Bank has assessed the transactions and determined that the total loss incurred amounted to ₹65,40,856.35. To address this, Sampat had reimbursed ₹62,91,094 to the Bank and requested that the remaining balance of ₹2,49,906 be deducted from his Provident Fund (PF) contributions to cover the full amount of the loss.
Following a comprehensive investigation, which included gathering substantial oral and documentary evidence, the investigating officer submitted a charge sheet to the court.