CBI Registers FIR Over Rs 19.30 Crore Bank of India Loan Fraud Involving Nataraj Rice Mills

The Central Bureau of Investigation (CBI) has registered an FIR against the former directors of Nataraj Rice Mills Private Limited, several other individuals and associated companies for allegedly causing a loss of Rs 19.30 crore to the Bank of India.

The CBI’s Economic Offences Wing in Kolkata has launched a detailed investigation into the alleged financial fraud. The investigation will also examine the role of corporate guarantor companies and unidentified public servants, including bank officials.

The case is related to the Clubside branch of the Bank of India in Ranchi, which was formerly known as the Mid-Corporate branch. According to the allegations, the company obtained loans from the bank for purchasing paddy but diverted a significant portion of the funds to its associate companies. Investigators have also found evidence of alleged manipulation of financial documents.

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Nataraj Rice Mills Private Limited, registered in Kolkata, operated a rice mill in Dakra, located in Bihar’s Lakhisarai district. Between 2013 and 2025, the company received credit facilities worth Rs 20.43 crore from the Bank of India. This included a cash credit facility of Rs 17 crore and a working capital term loan of Rs 3.43 crore.

The bank sanctioned these loans to support the company’s business operations, including purchasing paddy, milling rice and supplying rice in the wholesale market. However, it is alleged that the company’s management diverted the loan funds to the accounts of associate companies and other related entities instead of using them for the approved business purposes.

Due to the company’s failure to repay the outstanding loans for a prolonged period, the Bank of India classified its account as a Non-Performing Asset (NPA) on June 24, 2025. At that time, the outstanding amount stood at Rs 19.30 crore. The investigation has also revealed that the company’s former directors had resigned approximately four months before the account was declared an NPA.

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The forensic audit report has also raised questions about the company’s cash transactions during the demonetisation period in November 2016. According to the report prepared by auditor M/s NH Agarwal & Associates, the company had a cash balance of Rs 1.09 crore as of November 8, 2016. Out of this amount, Rs 1.01 crore was held in old Rs 500 and Rs 1,000 currency notes.

The audit report alleges that the company’s management deposited the entire amount into bank accounts following the demonetisation announcement. Investigating agencies are examining these transactions to determine whether they were used to introduce undisclosed money into the formal banking system.

Another major irregularity identified in the forensic audit relates to the company’s short-term loans and advances. According to the report, these loans and advances stood at just Rs 45 lakh during the 2016-17 financial year. However, the amount increased sharply to Rs 23.83 crore by the 2022-23 financial year. This figure represented more than 40 per cent of the company’s total assets.

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The audit further alleges that a substantial portion of these funds was transferred to the company’s directors and their related parties. An examination of bank statements also revealed that crores of rupees were transferred to other entities, including Bhagwati Vintrade Private Limited.

The forensic audit reportedly found that several of these financial transactions were not fully disclosed in the company’s audited balance sheets. The CBI is now investigating the alleged diversion of loan funds, financial irregularities and the possible involvement of bank officials and other individuals in the case.

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