Union Bank whistleblower booked as bank alleges ₹3,145-crore share value erosion

Kasaragod: A Union Bank of India assistant manager, who allegedly blew the whistle on the bank's year-end deposit figures, has been booked by Kasaragod police, with the government-owned bank alleging that his disclosure resulted in an erosion of ₹3,145 crore in the value of its shares.

Based on a complaint filed by Union Bank law officer U Reeja from the bank's regional office in Kozhikode, Kasaragod police booked Poorandara J, an assistant anager at the bank's zonal office in Mangaluru, for alleged criminal breach of trust, cheating and offences under the Information Technology Act. Poorandara is a native of Kasaragod Kasaba village.

According to the FIR, Poorandara allegedly downloaded and copied the bank's year-ending business data for the financial year ended March 31, 2026, without authorisation. "He allegedly used the data to prepare a misleading letter and sent it to the RBI Governor and a news channel," Reeja said in her complaint to the police. The complaint alleges that the acts amounted to cheating and criminal breach of trust and resulted in an erosion of ₹3,145 crore in the value of the bank's shares.

Police have invoked Sections 316(4) and 318(3) of the Bharatiya Nyaya Sanhita and Section 66 of the Information Technology Act.

The alleged CASA window dressing
The disclosure attributed to the whistleblower became public on April 29, when CNBC-TV18 reported the alleged letter to the RBI that Union Bank had artificially boosted its current account-savings account (CASA) deposits at the end of the 2025-2026 financial year.

According to the report, the whistleblower had alleged that the bank's CASA deposits surged by around ₹31,000 crore in just two to three days before the close of the 2025-26 financial year on March 31.

The report, citing sources, said around 80% of the alleged increase, approximately ₹24,800 crore, came from government accounts.

The allegation was that the sharp last-minute increase amounted to "window dressing" of the bank's deposit position.

CASA refers to current-account and savings-account deposits. These are generally cheaper sources of funds for banks than term deposits. A higher proportion of CASA deposits can therefore lower a bank's cost of funds, allowing it to earn a wider net interest margin (NIM), the difference between the interest it earns on loans and investments and the interest it pays on deposits, and potentially boost its profit.

Whether the alleged increase amounted to window dressing would depend on how long the money remained with the bank, where it came from and the purpose of the transactions.

Stock takes a hit
Union Bank's shares came under pressure around the time the whistleblower allegations became public.

The stock closed at ₹170.48 on April 28, down 3.19%. On April 29, the day the allegations were reported, it fell another 1.86% to ₹167.31. The decline continued on April 30, when the stock fell 0.82% to ₹165.94.

The timing alone does not establish that the fall was caused by the whistleblower disclosure, as the stock had already declined 3.19% on April 28, before the allegations became public.

Gross loan outgo
A second development involving Union Bank's business numbers came in July, although it related to the first quarter of FY2027 and not the FY2026 year-end data referred to in the FIR.

Union Bank filed its first quarter (April-June) FY27 business update with the RBI, the banking regulator, after market hours on July 2. The update showed that the bank's gross advances, or loans outstanding, stood at ₹10.96 lakh crore, up 12.5% year-on-year.

Total deposits stood at ₹12.83 lakh crore, up 3.5% from a year earlier but down 1.8% from the previous quarter. Domestic CASA deposits grew 11.72% year-on-year but also declined on a quarter-on-quarter basis.

The market reacted sharply when trading resumed the following day.

On July 3, Friday, Union Bank shares opened at ₹168.79 against the previous close of ₹174.35 and fell to an intraday low of ₹161.60, a decline of about 7.3%. The stock eventually closed at ₹163.09, down about 6.5%.

It was the bank's biggest single-day fall in three months. Market reports attributed the decline to concerns over slower credit growth, weaker sequential deposit growth and Union Bank's performance compared with peers such as Canara Bank. To be sure, the bank's full Q1 financial results were released on July 15.

The July business numbers are relevant to the present case for another reason. While the FIR specifically said Poorandara allegedly downloaded and copied the bank's year-ending FY2026 business data, the period of occurrence recorded in the FIR runs from April 1, 2026 to August 31, 2026, the date on which Reeja gave her statement to Kasaragod Town Police.

This does not establish that Poorandara accessed or shared the July Q1 data. But the broad period mentioned in the FIR encompasses the July business update and the subsequent stock-market reaction, making it a matter that the investigation may have to clarify.

Calls and messages sent to Reeja, the bank's law officer, went unanswered.