The sudden emergence of a nameless bank, also called faceless bank/gravy train/kar khat bank (one week bank)/chiahpuam, without name, addresses and management, giving 8-12 per cent returns per week or mutually agreed upon rate of return, first reported in media in September 2008, has been confirmed operating in the Aizawl, capital of Mizoram for the past six (6) months.
Lured by extremely high rate of returns, the nameless bank spread like wild fire during this period. It attracted deposits from all section of the society - from vegetable vendors, businessmen and even Government officials and Government Departments. Some even suspect involvement of commercial bank employees and politicians.
Consequently, all banks in Aizawl including State Bank of India, Vijaya Bank, Mizoram Rural Bank and Mizoram Co-operative Apex Bank reported significant decline in their deposits in recent past. It has also been reported that people withdrew money from their accounts in these banks to deposit them in the nameless bank.
The News Link, an English daily from Aizawl in its October 27, 2008 issue reported the possibility of foreign exchange arbitrage as the mode of operation of the nameless bank. Since the nameless bank did not defaulted on its interest payments and that the prevailing rate of exchanges were i,e., around 20-30 Myanmar kyat per Indian Rupee and around 6 Myanmar
Kyat per US Dollar, this aspect of the mode of operation of the bank was believed to be plausible by all. Thus, trusted and sustaining.
However, cases of default by nameless bank were reported October 2008. The Shillong Times in its November 12, 2008 issue reported that Aizawl police received 276 FIRs in this regard. Further, the Government of Mizoram also launched police investigation into the matter. Reserve Bank, Guwahati had also conveyed it concern over the matter to the Government of Mizoram.
Meanwhile, a woman (C Lalmuanpuii) believed to be kingpin of the nameless bank was arrested from Karimganj district of Assam on November 9, 2008. Aizawl police, in this connection had arrested 26 other people and seized Rs 2,53,85,840/-, freezed Rs 2,46,18,573 in various banks accounts and seized 20 vehicles used by agents of the bank. The news.webindia123.com, quoting UNI reported that total investment in the bank could be as high as Rs. 3,000 lakh.