On September 15, Velloor police station in Kottayam received an unexpected visitor: Mohammed Bader Al Qattan, Chief Consumer Officer for Al Ahli Bank of Kuwait K.S.C.P. Accompanied by a colleague and a Kochi-based lawyer, Qattan arrived with a stack of complaints, seeking police assistance to apprehend a Velloor native who allegedly defrauded the bank of ₹63 lakh before leaving Kuwait without repaying his loans.
After formally lodging this initial complaint, Qattan proceeded to other police stations across Kottayam and Ernakulam districts, tracing the hometowns of additional loan defaulters. His comprehensive list included the names and details of 13 nurses working in various Kuwaiti hospitals, against whom the bank accused willful loan defaults amounting to approximately ₹10 crore.
According to the bank, it has suffered losses of around ₹270 crore from loans disbursed to 806 Indian nationals over the years, with Keralites constituting a staggering 90% of these defaulters.
As Qattan departed the police station, an officer quipped, “Is it really that easy to secure such large loans in Kuwait? Perhaps I should consider moving there too.” Qattan responded with a wry smile, acknowledging the officer’s astute observation regarding the once-liberal lending policies of Kuwaiti banks.
However, those days are long gone. Following these extensive fraudulent activities, Kuwaiti banks have drastically tightened their loan procedures and guarantee requirements. Moreover, they have initiated proactive measures, sending officers to the defaulters’ hometowns and pursuing rigorous legal action to recover their funds.
The Gulf Bank Precedent
Qattan’s visit to Kerala was not an isolated incident. It mirrored events from November 2024, when two representatives from Gulf Bank K.S.C.P., another prominent Kuwaiti institution, traveled to the state. They filed similar complaints against 10 Keralites, alleging that 569 individuals, predominantly Keralites, deliberately defaulted on loans, cheating the bank out of ₹341 crore. The State Crime Branch is currently investigating these complaints.
Bank officials have identified a clear pattern in the financial behavior of these defaulters: borrowers intentionally resign from their positions and leave Kuwait without notifying their banks or settling their debts. “Kuwaiti banks typically offer loans to expatriates based on their civil ID and salary certificates,” explains Thomas Anakkallunkal, the lawyer representing both banks in India.
Loan EMIs are usually deducted directly from the borrower’s salary. However, between 2020 and 2021, many nurses in Kuwait migrated to European countries and Australia without informing their banks. It appears these individuals used the borrowed funds to cover their migration expenses, Thomas states.
“Some employees secured substantial loans after finalizing their migration plans, then departed the country without repayment. Banks only became aware of the fraud when loan repayments ceased and salaries were no longer credited to the borrowers’ accounts,” the lawyer elaborates.
While some Gulf Bank defaulters cited COVID-19-related financial hardship, travel restrictions, and job losses as reasons for non-repayment, Thomas dismisses these claims. “Most of these borrowers were employed in the public healthcare sector, meaning job loss during the pandemic was highly improbable. Therefore, such arguments lack credibility,” he asserts.
Interestingly, one Gulf Bank defaulter, upon learning of the legal proceedings against him, agreed to settle his dues. This individual, who reportedly owed ₹63 lakh, fully repaid the loan in December 2024, just one month after the bank filed a complaint with the Oonnukal police in Ernakulam. Sources indicate he later petitioned the Kerala High Court to quash the FIR.
In addition to filing police complaints, the banks are also engaging in mediation talks with defaulters to facilitate debt recovery.
The Defaulters’ Side of the Story
The mother of one alleged defaulter in Kottayam expressed distress when questioned about the case against her son, who, according to the bank’s complaint, owes ₹80.66 lakh. “My son and his family, including a daughter with a disability, moved to the U.K. for a new opportunity after working in Kuwait for over 20 years. He never intended to defraud the bank,” she argues in his defense.
She claims the bank seized his post-service benefits and COVID duty compensation, which she believes would have covered his EMI payments for at least five years. “The bank took everything from his account, leaving him as a defaulter. He is willing to repay the remaining amount, but he needs more time,” she pleads.
C. Unnikrishnan, a lawyer representing some of the accused in similar cases, suggests that loan defaults can stem from various factors. “While some may have intentionally defaulted, others genuinely couldn’t repay due to unforeseen circumstances like job loss or business closure. In such instances, they can present evidence in court to demonstrate how their repayment capacity was diminished,” he explains.
“Crucially, they must also prove they had no criminal intent to evade repayment to avoid charges of cheating. If civil courts in Kuwait have issued decrees after due process, those decrees can be enforced here. However, if accused individuals were denied a fair hearing and ex parte orders were issued, they can argue that natural justice was denied, rendering the decree unenforceable in India,” Unnikrishnan adds.
Meanwhile, the Economic Offences Wing (EOW) of the State Crime Branch has initiated investigations into Gulf Bank’s complaints. “The investigation is in its early stages, and we are scrutinizing transactions made by the accused in both Kuwait and Kerala. Those who failed to repay loans despite securing new employment are being closely monitored,” states N. Rajesh, Superintendent, EOW.
Sources indicate that Al Ahli Bank’s complaints may also be transferred to the EOW, given the similar nature and gravity of the offenses. Police have charged the defaulters with cheating under Section 420 of the Indian Penal Code, among other charges.
“The banks have also invoked Section 208 of the Bharatiya Nagarik Suraksha Sanhita, which stipulates that an Indian citizen committing a crime overseas is subject to the same legal consequences as if the crime occurred in India. The police will require sanction from the Central government to file a chargesheet for trial in these cases,” Thomas confirms.
Far-Reaching Repercussions for the Diaspora
The Malayali diaspora in Kuwait is already experiencing the negative fallout from these incidents, according to their representatives. “Kuwaitis once viewed Indians, particularly Keralites, as a low-risk category for loans. However, these recent events appear to have significantly tarnished that reputation,” notes Farooque Hamadani, vice-president of the Kerala Muslim Cultural Centre, Kuwait.
NoRKA-Roots, a field agency under the State government’s Department of Non-Resident Keralites Affairs, expresses concern over the developments. Ajith Kolassery, Chief Executive Officer, emphasizes that these cases have created a severe trust deficit between Kuwaitis and Keralites.
“Malayalis have earned global respect for their cultural integration, adaptability, and peaceful nature. These incidents undermine those very qualities, leaving a stain on the image of the Indian population abroad,” he laments.
The agency is now planning to incorporate financial literacy modules into its pre-departure orientation programs for nurses seeking employment overseas.
As Qattan and his team brace for a protracted legal battle in Kerala, these unfolding events have cast a shadow of anxiety over all involved, including the family members of those implicated, like the Kottayam mother, who finds herself unnerved by every ringing phone call.