Shivamogga police have arrested two persons on charges of cheating several banks after obtaining loans amounting to ₹28 lakh by pledging gold-coated (fake) jewellery.The arrested have been identified as Lokesh, 39, of Bilmane Arekallu village in Tirthahalli taluk, and Sudha of Malavagoppa in Shivamogga. Three others involved in the case — S.Y. Ravi Shankar, Rahul and Sharath — are absconding.Shivamogga SP B. Nikhil, on Saturday, told the media that Doddapete police had investigated the case after receiving a complaint from the branch manager of Punjab National Bank on July 3. The accused had pledged jewellery at the bank to obtain a loan of ₹7.62 lakh, but failed to repay it. When the jewellery was due to be auctioned, bank officials discovered that it contained only 10% gold.“The accused pledged jewellery with only 10% gold content, whose genuineness cannot be accurately verified through the simple acid test that banks normally conduct. However, at the time of auction, jewellery is subjected to a more thorough check. It was only then that bank officials realised they had been cheated,” the SP said. The accused chose only those banks that conducted only acid tests at the time of sanctioning the loan.The accused had similarly pledged over 416 grams of jewellery and obtained a total of ₹28 lakh in loans from various institutions, including Vartakara Souharda Sangha in Tirthahalli, Siri Souharda Credit Cooperative Society in Shivamogga, DCC Bank at Gopala in Shivamogga, the Indian Overseas Bank branch in Shivamogga, and a jewellery shop in Shivamogga.The SP said the investigation had revealed that the gang was involved in similar crimes in several other districts and States, and that further investigation into the case was under way. He appreciated the efforts of police inspector Satyanarayana, PSI Narayana Madhugiri; and the staff of Doddapete Police Station, who conducted the investigation. Published - July 11, 2026 08:06 pm IST