Major Financial Frauds In India

Alisha Jain
Jun 30, 2019   •  39 views

The Banking system in India had received a setback in past years. Due to innumerable frauds in the banking sector, the financial soundness of the banking system had been disrupted. The strong & corruption free images of banks are wrecked by businessmen like Vijay Malya & Nirav Modi. They are repeatedly in the news not because they are business tycoons but because of their dishonesty & frauds.

Here is the list of some mind-boggling frauds committed in India:


An investigation done by the CBI revealed that Bank of Maharashtra, Oriental Bank of Commerce, IDBI and some other bank officials opened approximately 10,000 fake bank accounts. These accounts were opened to facilitate the unrecorded transfer of Rs 1.5 billion loans to fraud parties.


In Maharashtra, about nine FIRs were lodged against the fixed deposit fraud by public sector of about Rs 7 billion in 2014.

In the same year, Electrotherm India is charged with Rs 4.36 billion payment against loan to the Central Bank.

Bipin Vohra, a Kolkata - based industrialist committed a fraud of about Rs. 14 billion against Central Bank Of India.

Vijay Malya was also declared as wilful defaulter by the termination of this year due to his due amount by Union Bank of India, SBI & PNB.


A fraud of over Rs two billion was committed by Jain Infraprojects from Central bank of India in the year 2015.

A foreign exchange scam of Rs 60 Billion through a phony Hong Kong corporation involving officials from different banks was also discovered in this year.


One of the biggest bank scams registered in India involves Syndicate Bank where four executives opened almost 380 fake accounts committing a fraud of Rs 10 billion using forged cheques, LoUs and insurance policies.


Malya owing a huge debt fled the country in 2016 before charge sheet was filed against him by the CBI.

In 2017, Winsome Diamonds became India's second largest corporate defaulter due to the failure to repay its debt of over Rs 7000 crore.

CBI charged six cases against the associated companies and the group.

In 2017, Nilesh Parekh, a business tycoon from Kolkata was arrested by CBI for defrauding banks by diverting loan money through shell companies in Singapore, Hong Kong and UAE.


The recent fraud added to the list is committed by Nirav Modi, a diamond merchant. The fraud is of about Rs 11450 crore. In spite of filing charges against the Diamond King, no money has been recovered. After receiving at least 150 Letters of Undertaking(LoUs), it is not feasible for the Group to commit loan fraud against Punjab National Bank and many other banks.

In addition to the Rs 11,450 crore fraud from PNB, an additional fraud of Rs 3,000 crore from 17 different banks is committed by him according to a report published in The Indian Express.

In spite of registering complaints & files, the government is unable to make even a single arrest & recovery of lost money. This indicates how corrupt our economy is & how poor is the financial stability of the country. It's high time to act in this regard & decrease the intensity of bank scams in India.