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IDBI Bank Fraud (2018): A 600 Crore Loan Fraud


No wonder if you read about another Indian banking fraud/scam in this blog. Nationalized Banks of India have the responsibility to contribute efficiently to running the country's economy. However, what if the system which is the foundation of that country's economy is found guilty, followed by an unexpected financial fraud? Yes, this post is talking about the IDBI Bank fraud case and its impact on our country's economy. Like other banking financial scams, IDBI also suffered due to its high authority involvement in the scam.

IDBI, or Industrial Development Bank of India, is one of India's most reputable and trustworthy financial institutions. It operates as a commercial and wholesale bank. A total of 3,683 ATMs and 1,892 branch offices are available in Dubai. IDBI bank Fraud was allegedly perpetrated by then-senior bank staff and other loan accounts of Axcel Sunshine Limited, located in the British Virgin Islands, and Win Wind Oy, based in Finland. Get the full story on the IDBI bank fraud and learn about how bank officials were involved in the IDBI bank fraud.


  • A total of 15 IDBI bank employees have been charged with IDBI bank fraud.
  • More than 50 authority groups conducted inspections in 50 locations throughout ten cities.
  • The CBI has filed a complaint against Aircel founder C Sivasankaran and three firms as part of a broad crackdown.

About IDBI Bank

IDBI Bank Limited is a development financial institution and a life insurance company subsidiary. It was founded in 1964 as an act to give credit and other financial aid to the Indian industry's development. IDBI Bank's equity shares are traded on the Bombay Stock Exchange and the National Stock Exchange of India. At the moment, the government owns 45.5 percent of IDBI Bank.

There were 16,555 employees at the bank, with 197 of them being disabled. IDBI Bank was placed #1197 in the Forbes Global 2000 in May 2013. In addition, it was named 'Overall Best Bank' and 'Best Public Sector Bank' in the 2011 Dun & Bradstreet Banking Awards. If we talk about the strength of the IDBI Bank, then the strength indicates what an organization excels at and what sets it apart from competitors. This includes a strong brand, a dedicated client base, a strong balance sheet, and distinctive technology, among other things. Here are some characteristics that distinguish IDBI Bank from other financial institutions:

  • The IDBI Bank's key strength is that it employs cutting-edge technology to help with its core banking functionalities.
  • There are 943 branches and 1529 ATMs in the whole bank's network.
  • IDBI has a talented workforce of 18000 workers.
  • The bank's scale has increased by 60% in comparison to the prior year. There are numerous benefits to being the first to open the 'G-sec portal.'
  • The IDBI is a big commercial bank in India that focuses on industrial infrastructure and growth. Its product basket is divided into 14 separate categories and subcategories. This platform allows institutional investors to invest in government assets.
  • The bank's relocation to Mumbai signals a boost in capital market infrastructure, information technology, asset management, and life insurance subsidies.

Next, you will know what was the IDBI bank fraud in Detail.

An overview of the IDBI Bank Fraud Case

  • One of the most well-known examples of how IDBI bank's top management robbed their bank is the Rs 600 loan scandal. Apart from MS Raghavan, the then-CMD of IDBI Bank, the CBI has also charged MO Rego, the current M.D., and CEO of Syndicate Bank, and Kishore Kharat, the current M.D. and CEO of Indian Bank.
  • On April 26, CBI authorities announced that the agency had filed a case against Sivasankaran's two companies and the CEOs of Syndicate Bank and Indian Bank in IDBI bank fraud. This was for allegedly defaulting on IDBI Bank loans totalingRs 600 crore. The CBI has charged former IDBI Bank CMD KishorKharat, currently M.D. and CEO of Indian Bank, and Syndicate Bank MD and CEO MelwynRego. MelwynRego was previously Deputy MD of IDBI Bank.
  • Win Wind Oy, which filed into bankruptcy in Finland in October 2013, received 322 crores in loans from the bank in October 2010. According to the CBI, the sum was designated a non-performing asset. The bank approved another loan of 523 crores to Axcel Sunshine, a Siva Group partner, in February 2014. "The funds were used to repay debt from other holding companies, notably Win Wind Oy," said the spokeswoman."
  • The CBI filed a case against Aircel founder C Sivasankaran, three businesses Axcel Sunshine Limited (British Virgin Islands) and Win Wind Oy (Finland) as well as 15 IDBI bank officials for defrauding the financial sector to the tune of Rs 600 crore in a significant crackdown on IDBI bank fraud.

CBI Report on IDBI Bank Fraud Case

  • The CBI has charged 15 former and current senior IDBI Bank officers and 24 others, including Aircel founder C. Sivasankaran, 11 firms, and their directors, with defrauding the bank for Rs 600 crore.
  • The agency conducted searches on the accused's premises at 50 locations across following a recommendation by the Central Vigilance Commission, an FIR was filed in Delhi, Mumbai, Chennai, Faridabad, Gandhinagar, Bengaluru, Belgaum, Hyderabad, Jaipur, and Pune.
  • According to the CBI, IDBI bank fraud was conducted by then-senior bank employees and others through loan accounts of Axcel Sunshine Limited, situated in the British Virgin Islands, and Win Wind Oy, based in Finland.
  • In the IDBI bank fraud case, M.S. Raghavan, the former CMD; Kishore Kharat, the then CMD (now CMD and CEO of Indian Bank); former deputy managing director (DMD) B.K. According to the agency, Batra, and former DMD M.O. Rego, the new M.D., and CEO of Syndicate Bank, are among the accused top bankers.

Legal Action Against The IDBI Bank Fraud Case Accused

The CBI had named 15 bank officials who worked at top levels at IDBI Bank between 2010 and 2014 when loans were sanctioned to Sivasankaran's firms. This is in its FIR filed in response to a complaint from the Central Vigilance Commission. The CBI filed a case under the Indian Penal Code (IPC) sections 120-B, 409, and 420, as well as the Prevention of Corruption Act, 1988, section 13(2), read with 13(1)(d). According to the CBI, searches were underway at over 50 locations across ten cities at the time of reporting this article, including Delhi, Mumbai, Faridabad, and Bengaluru, among others.

Conclusion: IDBI Bank Fraud Case

A professional banking framework is designed for any country's economic progress. The banking sector's position has changed dramatically throughout time as a result of a variety of economic variables at play, both at the national and global levels. This enabled the financial sector to explore new opportunities and spread its influence beyond a country's borders. Parallel to the massive movement in trade and commerce, the banking system witnessed massive revolutionary changes. These policies include the admission of new private sector banks and information technology, among other things (such as NEFT and Smart Cards), and changes to capital adequacy rules. The banking sector's efficiency and productivity have greatly increased as a result of these developments. However, while India's banking system grows in terms of total income and profits, the amount of money lost to bank fraud continues to rise. This concerns both the Reserve Bank of India and bank management. These bank robberies appear to be unique in terms of method and size. This negative trend in the financial system causes losses for banks and a loss of trust in them. This article gives readers a basic understanding of bank fraud in India and the legal systems that control it.

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