Arrested manager Sher Singh and some of his staff had allegedly used names and fake land records of nearly 12 more people from the adjoining villages to give loans to unauthorised persons.

After Sher Singh’s arrest, the bank authorities are now claiming that they have sent just “general information” to the farmers and not recovery notices.

AGM of Allahabad Bank, Jhansi Zonal Office, R N Mohanti told The Indian Express: “Allahabad bank has not pressurised any customer for paying back the loans since September. The bank still owes crores of rupees to the people in the region,” he said.

Accepting that irregularities had taken place during the tenure of Sher Singh, Mohanty said the objective of sending “notices” to the villagers was to identify those who have taken loan and those who have not.

“Apart from the notices, field officers also visited the villagers to clarify if they have been served notices and whether they have taken any loan. They must report the matter to bank,” he added.

He also said that some imposters posing as brokers, who might have had nexus with Sher Singh, must have misguided the villagers.

“The issue was almost resolved, the bank has further distributed Rs 30 lakh to the villagers during the last fortnight after complete verification,” he added.

Another senior official said the illiterate villagers had panicked after they were served notices, which they did not understand.

“Around 2,200 accounts were started by Sher Singh, senior officials were verifying all those accounts to resolve the issue,” he said. He added that bank vigilance team was trying to identify few unauthorised middlemen still active and who had pressurised the villagers for loan recovery.

Branch Manager of Babai branch Jaswant Singh told The Indian Express that the bank has stopped issuing recovery notices and is now verifying all the account holders and those who have taken loans.

A special cell has been constituted at Babai branch on January 2 to look into grievances of the villagers.