When the System Sleeps: ₹4.6 Crore ICICI FD Scam and What It Reveals About India’s Regulatory Gaps

In the quiet lanes of Kota, Rajasthan…

…dozens of families placed their life savings into fixed deposits, believing their money was safe, untouched, and silently growing. Many of them were elderly, retired, or unfamiliar with the rapid shift to digital banking. What they didn’t know was that the person they trusted a relationship manager was quietly draining their life’s savings for nearly three years.

By the time the truth surfaced, ₹4.6 crore had vanished.

This wasn’t a loud heist. No break-ins. No masks. No getaway vehicles. Just one insider, a flawed system, and a silence that allowed it all to continue.

Gradual Theft That Went Unnoticed

Between 2020 and 2023, Sakshi Gupta, a relationship manager at ICICI Bank’s Kota branch, committed a long-running fraud that escaped detection for over two years. By tampering with registered mobile numbers and prematurely breaking fixed deposits, she siphoned ₹4.58 crore from 110 FDs belonging to 41 customers—many of whom were elderly and unaware of digital procedures.

The funds were rerouted into personal accounts and stock market investments, most of which were eventually lost.

Confirmed Facts & Official Actions

• Who Committed the Fraud:

Kota Police and ICICI Bank’s internal team identified Sakshi Gupta as the main accused. She was arrested on May 31, 2025.

• How the Scam Worked:

She replaced customer phone numbers with her relatives’, diverted OTPs, broke FDs prematurely, and misused overdrafts and loans. She used Demat accounts for funneling funds. One elderly woman’s account alone was used to pool over ₹3 crore.

• Discovery & FIR:

An internal audit revealed the fraud. An FIR was filed on February 18, 2023. ICICI suspended Gupta and promised to reimburse genuine customer losses.

Where the System Failed

1. Lack of Internal Red Flags

No system alerts were triggered when multiple FDs were broken, or when mobile numbers were changed on linked accounts. No physical verification or callback protocol was enforced especially for senior citizens or high-value transactions.

2. Gaps in Regulatory Oversight

The Reserve Bank of India (RBI), despite routine audits, did not detect this fraud. It was instead ICICI Bank’s internal mechanism that uncovered it.

While RBI’s audits may not always cover individual FD accounts unless red-flagged, the absence of alerts or detection in this case raises serious concerns about both bank-level monitoring and regulatory frameworks.

3. Repeat Violations, Minimal Deterrence

ICICI Bank has faced penalties earlier:

• ₹12.19 crore (Oct 2023): Delayed fraud reporting & non-compliance.

• ₹97.8 lakh (May 2025): KYC and cybersecurity violations.

Yet, no preventive structural change was enforced to secure FD operations especially involving elderly customers.

Government Response: The Silence That Hurt

As of June 2025, no official directive or public statement has been issued by:

• The Finance Ministry

• The Reserve Bank of India

• The Banking Ombudsman

This silence is concerning especially as ordinary citizens, many of them elderly, were targeted. While investigations are ongoing, there has been no proactive policy or public engagement to address the systemic issues this scam exposed.

Rather than direct blame, this raises questions on why timely preventive measures or mass communication efforts were absent, even after repeated penalties and similar fraud incidents in India’s banking history.

 What Needs to Change

1. Stricter FD Protection Mechanisms

• Dual OTP and mandatory physical re-verification for breaking FDs over ₹2 lakh.

• Trigger immediate alerts for mobile number changes linked to FDs.

2. RBI Must Upgrade Monitoring Norms

• Mandate real-time red flag systems for bulk FD breaks and inter-account transfers.

• Enforce monthly reports on all high-risk retail frauds, especially in branches with repeat violations.

3. A National FD Fraud Insurance Policy

• Raise insurance limits beyond ₹5 lakh for fraud-related FD losses.

• Launch fraud-specific public insurance cover under a centralized scheme.

4. Awareness Campaigns for the Vulnerable

• Banks must regularly educate customers on FD fraud safety.

• Use Doordarshan, regional FM/radio, and mobile alerts (SMS/IVR) in local languages to reach rural and elderly account holders.

Not Just a Bank’s Failure — A Systemic One

This wasn’t a one-off theft it was a collective failure. A banking system that overlooked red flags, regulators who remained silent, and a trust gap that keeps growing with every new scam.

If urgent reforms and protections are not introduced now, this won’t be the last betrayal just the latest in a long list of preventable disasters.

Sources & Credits

• [The Times of India: Rs 4.58 crore siphoned from FDs explained in 10 points]

• [The Economic Times: ICICI manager diverts ₹4.6 crore to stocks]

• [News18 Rajasthan: Woman bank manager dupes customers of ₹4.6 crore]

• [Times Now News: Kota bank manager diverts ₹4.6 crore from FD]

• [RBI Penalty Notices: Oct 2023 & May 2025]