PAN Card Misused for Loan Fraud in Bank: What to Do and How to Respond

PAN Card Misused for Loan

Overview of the Issue

In an alarming case of identity theft and institutional negligence, an individual’s PAN card was misused by a third party to secure a loan from a bank, in this case, “Xyz Bank” What makes the matter worse is that the actual PAN card holder never had an account with the bank in question. Yet, a loan was processed and approved using their identity credentials.

Such incidents are not only distressing but also have long-term consequences — from credit score damage (CIBIL) to potential legal liabilities.

How Does This Happen?

This kind of fraud can occur due to:

• Lax KYC (Know Your Customer) verification by the bank.

• Forged or tampered documents submitted during loan processing.

• Inadequate internal checks by financial institutions.

• Misuse of physical documents or leaked identity information.

Consequences for the Victim

• CIBIL Score Damage: The loan appears in the victim’s credit report, lowering their credit score affecting the future borrowing capacity.

• Legal Liability: The person might start receiving notices for repayment or legal action.

• Reputational Harm: Especially serious for professionals and businesses relying on good creditworthiness.

• Psychological distress and financial uncertainty.

Steps to Take: Legal & Procedural Remedies

1. Write a Complaint to the Bank (Branch and Nodal Officer)

Demand an immediate investigation and share identity proof to establish non-involvement.

Key Points to Include:

• Details of PAN misuse,

• Clarify you never applied for any such loan or never hold an account from this Bank in question,

• Request cancellation of the loan or removal of loan account their name and demand correction in CIBIL,

• Demand certified copies of loan/KYC documents used.

2. File an RTI with “XYZ Bank “Headquarters

Ask for full disclosure of documents used in opening the loan account using your PAN.

What to Request in RTI:

• Copy of KYC form and supporting documents used

• Process followed for KYC verification

• Date of loan application & approval

• Names of officials who verified & approved the loan

• Internal guidelines followed by “XYZ Bank” in this process

• Security measures against identity theft.

If the branch does not hold this information, request forwarding under Section 6(3) of the RTI Act.

3. File a Police Complaint / FIR

File a written complaint with the local police station or cybercrime cell under sections of identity theft, forgery, and cheating (BNSS and IT Act, etc.)

4. Report to CIBIL and RBI Ombudsman

• Raise and file a dispute with CIBIL to correct your credit history.

• To directly dispute the loan entry on your credit report by visiting the CIBIL website: CIBIL Dispute Resolution Portal

  Steps:

  1. Create/Login to your CIBIL account.

  2. Go to the Dispute Center.

  3. Select “Dispute an Account” → Enter loan account details.

  4. Mention the fraud and that the loan was not applied for by you.

  💡 Attach proof: complaint to bank, police FIR copy, PAN/Aadhaar.

  CIBIL will forward the dispute to the bank for verification. The bank must reply within 30 days. If found valid, the entry will be removed or corrected.

Note- CIBIL typically may take a minimum of 30-60 days to respond to disputes raised before it. Once a dispute is filed, CIBIL, in accordance with RBI guidelines, contacts the lender (in this case, “XYZ Bank”) to verify and address the issue before providing a resolution. Depending on the circumstances, and in compliance with RBI directives, CIBIL may also provide compensation as per its compensation policy, if applicable. This is why CIBIL, by default, requires your existing “saving account” banking details during the dispute resolution process.

• If the bank doesn’t resolve the matter within above days or gives an unsatisfactory response, escalate to the RBI Banking Ombudsman via the CMS portal:

  What to include:

  • Description of grievance

  • Bank complaint reference number

  • All supporting documents

  • Proof of identity

  Ombudsman can:

  • Order correction of CIBIL record

  • Order bank to provide compensation for harassment

  • Ensure future safeguards

Note- Before filing a final complaint with the RBI Ombudsman, it is required that we follow the existing remedy available and upon expiry of 30 days, we file here before RBI Ombudsman. Also, it should be taken into consideration that the case should not be subjudice before any judicial body.

Sample Letter to Bank Branch/Nodal Officer

To
The Branch Manager
Bank Name
[Branch Address]

Subject: Misuse of My PAN Card for Fraudulent Loan – Urgent Action Required

Dear Sir/Madam,

I am writing to report a serious matter of identity fraud. My PAN card ([PAN Number]) has been misused to take a loan from your branch. I wish to clarify that I have never applied for any such loan nor do I have any account with “XYZ Bank”.

Kindly take urgent action to investigate the matter. I request:
1. Immediate cancellation of the fraudulent loan and closing of. the loan account in my name.
2. Removal of this entry from my credit records.
3. Certified copies of KYC and loan documents used for loan processing.

Please treat this as urgent and confirm action taken within 7 working days.

Enclosed:
– Copy of PAN
– Identity & address proof

Sincerely,
[Your Name]
[Contact Info]

Sample RTI Application to “XYZ Bank” HQ

To

The Central Public Information Officer

“XYZ Bank”
Address-

PINCODE

City

Subject: RTI Application under the RTI Act, 2005 – PAN Misuse Case

Dear Sir/Madam,

As per RTI Act, 2005, kindly provide the following information regarding the fraudulent loan issued using my PAN ([PAN Number]):

1. Copy of KYC form and supporting documents submitted.
2. Verification process followed by the branch.
3. Date of loan application and approval.
4. Name/designation of officials involved in verification and approval.
5. Certified copy of the loan application.
6. Guidelines followed by “XYZ Bank “for KYC verification and loan sanction.
7. Safeguards to prevent misuse of customer identities.

If the information is held by another branch/office, kindly forward it under Section 6(3) of the RTI Act.

Enclosed:
– RTI fee of ₹10 via IPO
– Copy of PAN

Yours sincerely,
[Your Name]
[Address]

Sample Police Complaint Format

To
The Officer-in-Charge
[Name of Police Station]
[Full Address]
[City, State – PIN Code]

Subject: Complaint Regarding Fraudulent Use of PAN Card for Unauthorized Loan Issuance by “XYZ Bank”

Respected Sir/Madam,

I, [Full Name], aged [Your Age], residing at [Full Address], wish to lodge a formal complaint regarding the fraudulent use of my PAN card to obtain a loan from the “XYZ Bank” without my knowledge or consent.

Details of the Incident:

1. My PAN Card Number is: [PAN Number]

2. Mobile Number (registered with Aadhaar): [Your Mobile Number]

3. Email ID: [Your Email]

4. Address Proof Enclosed: Copy of Aadhaar/Utility Bill/Passport (as attached)

5. Date of Discovery: [Date when you found out about the fraud]

6. Bank Involved: [Branch Name & Address if known]

On [Date], I discovered through [mention how you came to know – e.g., CIBIL report, bank communication, loan recovery call, etc.] that a loan account was opened and disbursed using my PAN card, even though I have never applied for any loan from“XYZ Bank”nor do I hold any account with the bank.

Steps Taken So Far:

• On [Date], I contacted the concerned “XYZ Bank” branch via phone/email and informed them of this fraudulent activity.

• I also submitted a complaint to the “XYZ Bank” Customer Grievance Cell / Nodal Officer via [mode of communication and date].

• However, I have not received a satisfactory response, and the loan continues to appear under my name, affecting my credit score and reputation.

• The bank has refused to share KYC documents or clarify how the loan was sanctioned despite having my sensitive identity proof misused.

Relief Sought:

I request you to kindly register my complaint and take appropriate legal action under applicable sections of the IPC and IT Act against the unknown person(s) who fraudulently used my identity, and investigate the role of bank officials (if any) who allowed such a loan without proper due diligence.

I believe this constitutes criminal offences under Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) – of Impersonation, Cheating and dishonestly inducing delivery of property and committing Forgery and fraudulent use of documents, attracting the relevant provisions under the Information Technology Act, 2000 as well .

Documents Attached:

1. Self-attested copy of my PAN card

2. Self-attested copy of my Aadhaar card

3. Screenshot/report showing loan entry on CIBIL/credit report

4. Copy of email/letter sent to “XYZ Bank”

5. Any response (if any) received from the bank

6. Any other supporting documents

I request your good office to kindly acknowledge this complaint, investigate the matter, and help restore my credit profile by identifying and prosecuting the guilty. Kindly register an Complaint/ FIR in this matter and let me know the case number for further reference.

Thank you for your assistance.

Yours sincerely,
[Full Name]
[Signature]
[Date]
[Place]