Top 10 Biggest Bank Frauds In India ? | Biggest Bank Frauds In India

Before a pandemic, we all were almost talking about Nirav Modi or Mehul Choksi or Vijay Malay scams with the Indian baking system. It became ‘chai tapri’ and street discussion. Scams are an essential part of Indian banking and financial sectors. If we see the history and progress of Indian banking sectors, then, we can also realize the majority of laws and strictness came into existence after getting to know the loopholes of the same. That is the normal practice.

At present, Surat (Gujarat, India) based prominent shipyard company; ABG Shipyard became a point of discussion in the media and banking circle. It is also said that the amount of fraud is such a big that it is one of the Biggest Indian banking fraud till date. The central Indian agency, namely central bureau of investigation registered complain against AGB Shipyard, including the company’s directors and CMD.

Table of Contents

ABG Shipyard

It was incorporated in 1985. The flagship company of ABG (Group), it is one of the prominent and largest firms involved in repair and building of ships. Rishi Agarwal is promoter of the company. From the sources of Hindustantimes(dot)com, the firm has constructed 165 vessels, out of which 46 were for overseas customers. Its Dahej facility is capable of building vessels up to 120,000 DWT (dead weight tonnage) whereas Surat facility is capable of building vessels up to 18000 DWT.

Short Overview of ABG Controversy cum Case

Everything was going smooth until State Bank of India came forward to complain against ABG Shipyard. It is said that the cheating of INR (Rs.) 22,842 crores from 2012 to 2017 happened to a consortium of 28 financial institutions and banks.

This case is bigger than Nirav Modi and Mehul Choksi scam with Punjab National Bank. Hence, in that reference, ABG Shipyard is the Biggest scam by amount till now in the Indian Banking History. Company owes below amounts to respective major banks of India. (Information Source: hinduatantimes(dot)com)

Major Banks	Amount (INR{Rs}Crores)
ICICI Bank	7089
IDBI Bank	3639
SBI	2925
Bank Of Baroda	1614
Punjab National Bank	1244

CBI scrutiny took one and half years after the complaint lodged on 8^th November, 2019. It took time to clear blur picture and finally on the 7^th February, 2022, CBI filed a fresh FIR against the ABG Shipyard and it became talk of the town.

ABG Shipyard was the market leader and banks continued to lend money to them during 2005 to 2010 despite of some serious global crisis sign from US. Global debacles happened during recession of 2008 also hit ABG Shipyard that caused working capital crisis in the company and soon turned increment in operating expense.

Meanwhile, a forensic audit report also revealed that the defendants connived and committed unlawful activities including embezzlement and criminal breach of trust (between the years 2012 to 2017). This forensic audit was done by the consultancy namely Ernst and Young.

After the loan amount declared as NPA (Non-Performing Assets) in July 2016, it was also noted as fraud in 2019. Further investigation is still going on and it is a matter of time.