Massive Loan Scam Uncovered in SBI Branches in Gujarat

A large-scale loan scam has been uncovered in Dahod, Gujarat, where ₹5.5 crore worth of loans were fraudulently taken from two State Bank of India (SBI) branches—Yadgar Chowk Main Branch and Station Road Branch—using fake salary slips and forged documents. The scam involved 29 people, most of whom posed as government employees to qualify for loans they were not eligible for.

How the Fraud Was Carried Out

The scam was allegedly carried out with the help of two former branch managers and a group of middlemen. These middlemen prepared fake salary slips showing inflated salaries and even created documents claiming the applicants were teachers or ST bus drivers, even though they had no such employment. In many cases, loans were approved without proper verification, and some were given to individuals who had previously defaulted on other loans or had settled accounts—making them ineligible under normal banking rules.

Several shocking examples have come to light. One borrower took a loan of ₹19 lakh by claiming it was for buying construction material, but was found to have no such business, and the vendor invoice provided turned out to be fictitious. Another individual took a ₹2 crore home loan claiming to build a four-storey house, but only constructed two floors—the rest of the money was allegedly siphoned off.

At the Yadgar Chowk branch, 19 fraudulent loans were sanctioned between June 2022 and February 2024, during the tenure of manager Gurmeet Singh Bedi, who has now been named in an FIR and arrested. At the Station Road branch, 10 fake loans were granted between September 2021 and June 2024, under then-manager Manish Gavli, who has also been arrested. Both current managers have filed police complaints after discovering the irregularities during internal audits.

Police Investigation and Arrests

The case is currently being investigated by Dahod police, who have registered two FIRs—one at A Division Police Station and the other at B Division Police Station. So far, two ex-managers, three borrowers, and two middlemen have been arrested or detained for questioning. According to Sub-Divisional Police Officer Jagdishsinh Bhandari, the middlemen collected money from applicants in exchange for arranging loans using fake documents and passed a share of the bribe to the bank officials.

Audit Findings and Warnings

An internal audit by SBI uncovered the scam and flagged that several of the borrowers were already defaulters or had settled loans, yet were still given fresh loans. The audit pointed to serious lapses in verification and due diligence, raising concerns about internal controls in bank loan processing systems. This scam serves as a major warning for banks to strengthen their loan approval and verification procedures to prevent such frauds in the future.