Rs.764 crore Fraud in State Bank of India, ED seized assets of individuals
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The Enforcement Directorate (ED) has taken control of movable and immovable assets valued at ₹81.88 crore. This is part of a money laundering probe related to a large bank fraud case involving Vijay Gupta and Ajay Gupta. They are the promoters of Vindhyavasini Group of Companies. Along with them, several accomplices are also under investigation. According to sources from the ED, the accused caused a huge loss of ₹764.44 crore to the State Bank of India (SBI).
Background of the Investigation
This investigation started after the Mumbai unit of the Central Bureau of Investigation (CBI) registered cases under different sections of the Indian Penal Code and the Prevention of Corruption Act. The CBI team handling economic offences found that Vijay Gupta, Ajay Gupta, and others worked together with some bank officials, chartered accountants, loan consultants, and other associates to illegally obtain loans.
How the Fraud Happened
The accused allegedly applied for several loans and credit facilities from SBI using multiple companies under the Vindhyavasini Group. However, these loans were secured by submitting fake and forged documents. Instead of using the loan money for business purposes, the accused used it for personal benefits and other unauthorized activities. This caused SBI to lose a massive ₹764.44 crore.
Money Laundering and Asset Diversion
Further investigation by the ED showed that Vijay Gupta, Ajay Gupta, and their team moved the crime money around through more than 50 fake companies (known as shell entities). They also withdrew ₹42 crore in cash from the fraudulent loans. The accused used the money to buy properties under their own names, the names of family members, and through “benami” transactions (where assets are held in someone else’s name to hide the real ownership).
Arrest and Current Status
Vijay Gupta was arrested on March 26 this year during the ongoing investigation. He is currently in judicial custody as the case continues.
Each day we get news of frauds , embezzlement in different banks both in PSB and Private sector banks, despite the fact that there exists robust system of loan appraisal in every bank. Magnitude of frauds are also staggering . If these go unabated, then very shortly the banking system will collapse and depositors hard earned money will be at stake. Banks will not be able to return public money.Staff collusion in sanctioning of loans and laxity in post sanction measures result in huge frauds in banks. To check this increasing trend loan appraisal system should be strengthened further apart from strict staff accountability measures to be initiated. Pre sanction measures to be further strengthened to check unabated frauds in banks.