A spurt in faulty loans and non-performing assets (NPA) has been threatening the economy for some years now. As of 2021, Indian public sector banks collectively owed approximately Rs 6.17 trillion in non-performing assets which includes money that has been defrauded by scamsters.
It is alleged that during 2012 to 2014, the Bank of Maharashtra had sanctioned various credit facilities to Siddhi Vinayak Logistics Limited’s drivers without their knowledge. The company defrauded the loan amount and did not utilise the loan proceeds for the purpose for which they were sanctioned. The CBI booked a Bank of Maharashtra Officer, Padmakar Deshpande, along with the director of a Surat-based private logistics company Siddhi Vinayak Logistics Limited, in connection with the Rs 836-crore bank fraud case.
Nine people, including a former chief manager of Syndicate Bank were arrested for allegedly opening 386 accounts in three branches of Syndicate Bank in Rajasthan and "defrauding" the bank of Rs 1,000 crore using fake cheques, letters of credit and LIC policies.
ICICI Bank CEO Chanda Kochhar, her husband Deepak Kochhar and Videocon group MD Venugopal Dhoot were accused of causing irregularities in loans sanctioned by the bank to the group in 2012. The ICICI Bank sanctioned loans worth Rs 1,875 crore to the Videocon Group and the companies associated with it. A majority of these loans were found to be in complete violation of banking regulations and ICICI Bank policies.
Over 14 banks were involved including Bank of India, SBI, Union Bank of India and IDBI. Vikram Kothari, the promoter of Rotomac was accused of cheating seven banks of Rs 3,695 crore. It was found that he had misappropriated loans worth Rs 2,919 crore from seven banks and the total outstanding amount, including interest was Rs 3,695 crore. The CBI arrested Vikram Kothari for the alleged charges.
In September 2019, the Reserve Bank of India discovered that PMC Bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to Housing Development and Infrastructure Limited which was at the time almost bankrupt.
In the money laundering/siphoning scam, loopholes in the remittance rules to bring back illegal money from abroad were exploited. The scamsters transferred money to Hong Kong claiming that to be advance payments to vendors. Employees of various banks including Oriental Bank of Commerce and Bank of Baroda were allegedly party to the scam that amounted over Rs 6,000 crore.
Multiple banks, including UCO Bank, Bank of Maharashtra and Canara Bank were involved. Chartered Accountant Pawan Bansal was arrested by the CBI for allegedly striking deals between the Syndicate Bank and large companies for the sanction of large loans. It was discovered that the operation was well oiled and bribes to the heads of the public sector banks and financial institutions were given for loans in return. Bansal allegedly struck deals for loans worth over Rs 8,000 crore with these banks.
Vijaya Mallya is allegedly accused of defaulting over Rs 10,000 crore from more than a dozen Indian banks after his venture Kingfisher Airlines Ltd failed in around 2013.
Diamond trader Nirav Modi and his uncle Mehul Choksi were accused of allegedly defrauding Punjab National Bank of nearly ₹14,000 crore, with the help of some bank staff, negligent bank management and poor supervision by bank auditors.
ABG Shipyard allegedly took loans from a consortium of banks led by ICICI Bank, IDBI Bank and later SBI in 2001. The company is accused of defrauding Rs 22,842 crore over a period of five years. The CBI said that the account of ABG Shipyard was declared a non-profitable asset (NPA) in 2013.