CBI Launches Probe into Rs 26.98 Crore Loan Fraud by Private Firm against Indian Overseas Bank

Strategic Insights -

The Central Bureau of Investigation (CBI) has initiated a probe into a Rs 26.98 crore loan fraud by a private firm and its directors against Indian Overseas Bank (IOB). The private company, incorporated in June 2011, allegedly diverted the loan funds and manipulated its financial records. The CBI has registered a case against the firm on charges of criminal conspiracy, cheating, and criminal misconduct.

Key Takeaways:

  • The private firm, incorporated in June 2011, took a loan of Rs 31.50 crore from IOB for business purposes but allegedly diverted the funds and manipulated its financial records.
  • The CBI has alleged that the firm dishonestly diverted the funds and didn't repay the loan, resulting in an outstanding amount of Rs 26.98 crore.
  • The account was classified as NPA (Non-Performing Asset) in September 2013, and subsequently declared as fraud and reported to the RBI in September 2019.
  • The CBI has stated that the firm transferred a huge amount from the cash credit limit to its savings bank account, ensuring full utilization without any actual business activity.
  • The accused presented inflated and inconsistent financial statements and other financials to the bank to achieve desired credit facilities.

Statistics:

  • Rs 26.98 crore: The outstanding amount against the private firm and its directors.
  • Rs 31.50 crore: The loan amount sanctioned by IOB to the firm for business purposes.
  • Rs 26.98 crore: The amount classified as NPA in September 2013.
  • September 2013: The date when the account was classified as NPA.
  • September 2019: The date when the account was declared as fraud and reported to the RBI.

Sources:

  • Central Bureau of Investigation (CBI)
  • Indian Overseas Bank (IOB)
  • Ajay Tembhekar, Chief Regional Manager of IOB (Cuffe Parade)