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Indian Catholic priest arrested over bank loan scam

Father Thomas Peelianickal, 75, in custody in Kerala accused of cheating, forgery and fraud
Indian Catholic priest arrested over bank loan scam

Father Thomas Peelianickal (center) attends a farmers' meeting with local politicians wearing hats made of coconut leaves. TV channel Asianet aired this visual after the priest was arrested on June 19 in the southern Indian state of Kerala. (Screengrab)

Published: June 21, 2018 10:19 AM GMT
Updated: June 21, 2018 10:34 AM GMT

Police in Kerala have arrested a Catholic priest in connection with a loan scam in which scores of poor farmers say they have become bank debtors without their knowledge. 

A court in Alappuzha district of the southern Indian state remanded 75-year-old Father Thomas Peelianickal of Changanacherry Archdiocese in custody on June 19. He is accused of cheating, forgery and fraud in facilitating bank loans on behalf of farmers. 

Each charge, if proved, can carry a jail term of seven years.

"There are six cases against Peelianickal. In two cases, he has obtained anticipatory bail. He was arrested after bail was denied in the remaining four cases," said district police deputy superintendent Vijayakumaran Nair.

The priest is executive director of archdiocesan social service group Kuttanad Vikasana Samithi or development council based in Kuttanad, known as the rice bowl of Kerala. He has headed the 26-year-old council for the past 14 years.

Nair, who is part of the investigation team, told ucanews.com that the priest may become accused in more cases as the inquiry progresses. 

The council ran 1,500 self-help groups of six or seven members. It also helped these groups take out small farm loans ranging from 100,000 to 500,000 rupees (US$1,500 to US$7,500)

Archbishop Joseph Perumthottam of Changanacherry told ucanews.com that Father Peelianickal was arrested following confusion regarding certain bank loans. "We are studying the issue. A lawyer has been appointed for him," he said, adding that details could be shared only after analyzing the problem.

Police said they cannot estimate the total money involved in the alleged scam but local media reports estimated it to be about US$23 million.

Police said farmers filed complaints when banks approached them threatening to auction their homes to recover unpaid loans with interest.

In another complaint, a group of six women told Asianet television channel that Father Peelianickal helped them get bank loans of 90,000 rupees each but took 30 percent of the money as a loan for his council and refused to return it.

It is also claimed that farmers were helped to get smaller loans from the bank but the council took bigger loans using the same documents in the name of the farmers using forged signatures and records. 

The priest's lawyer M.M. Appachankutty said his client was only the fourth accused in cases where six people were accused.

Father Peelianickal signed some documents recommending people for loans in order to help them, he said. "The priest should not be blamed for what he did in good faith," the lawyer said.

However, P. Prasad, local leader of the Communist Party of India that runs the state, said it is not a case involving just one person or a small group of six people.

"It needs wider and comprehensive investigation as it involves several banks, officials and even the church," Prasad told a television discussion.

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